I need to preface this by saying I have no positions or any near term positions of owning stock in Staples or Office Depot as of writing this post.
With that out of the way, I have been reading quite a few pieces about how hedge fund company Starboard, who have previous dealings of buying stakes in companies and pushing them to take action, setting a target on Staples to merge with Office Depot. According to that Wall Street Journal article, Starboard has accumulated a 6% stake in Staples and 10% in Office Depot. With such large stakes, Starboard believes regulators will give the blessing to merge Staples and Office Depot not being a monopoly because of the behemoth known as Amazon.
Starboard has a lot of stake in the office supply giants as they helped marry Office Depot and Office Max last year. They hope to consolidate it further because Office Depot has already realized benefits of merging.
How Does A Hedge Fund Change Manufactured Spending?
Hedge funds look at companies and try to find “synergies” and push them together to reduce costs and increase profitability. While this has no impact to their end goals, we have lost the ability to order gift cards online from Office Max. Previously, they partnered with Gift Card Mall. After the Office Depot merger, we lost that ability. If there is further consolidation in this industry, another avenue may close. And if the consolidation is consummated, hopefully Office Depot merges into Staples and we’ll still have our ability to order gift cards online.