What Happened?
Shares of fast-food chain Jack in the Box (NASDAQ:JACK) fell 6% in the afternoon session after an activist investor signaled a potential push for changes at the fast-food chain.
Investor Sardar Biglari, who recently increased his stake in the company to 9.9%, has changed his status to an activist investor. This move signals a potential campaign for changes to the company's operations, board composition, or capital structure. The development follows the company's adoption of a "poison pill," a defensive strategy to prevent a hostile takeover. This shareholder rights plan was put in place after Biglari increased his ownership.
The fast-food giant is currently implementing a turnaround plan called “JACK on Track,” which includes closing underperforming restaurants and paying down debt. The increased pressure from an activist investor adds another layer of uncertainty for the company, which has been dealing with declining same-store sales. In its most recent quarterly report, Jack in the Box reported a 4.4% decrease in same-store sales.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Jack in the Box? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Jack in the Box’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Jack in the Box is down 48.5% since the beginning of the year, and at $21.11 per share, it is trading 64.9% below its 52-week high of $60.07 from July 2024. Investors who bought $1,000 worth of Jack in the Box’s shares 5 years ago would now be looking at an investment worth $289.19.
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