Why ValueVision Shares Jumped and Then Fell

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ValueVision Media (NASDAQ: VVTV  ) were all over the place today, gaining as much as 13% before finishing down 5% as the activist investing firm the Clinton Group announced a stake in the home-shopping-network specialist.

So what: Clinton Group said today that it owned a 5.8% chunk of ValueVision, and seeks to replace its chief executive. In a letter, it said that CEO Keith Stewart has missed targets and that ValueVision is being outperformed by its rivals. Clinton Group added that it would invest $25 million, the equivalent of a 10% stake, at a "substantial premium to the stock price. Shares spiked on the announcement of the letter but then seemed to fall as ValueVision defended Stewart's leadership and the current turnaround.

Now what: ValueVision shares have tripled this year, so the Clinton Group's criticism seems a bit odd. Even the investment firm admitted as much, saying, "The company was in bad shape when Mr. Stewart arrived and he rightly gets credit for keeping it afloat." Shares of ValueVision are up a whopping 1,700% since Stewart took the helm in 2009, though sales have fallen since then. Whatever the outcome, this story is far from over. You can stay on top of it by adding ValueVision to your Watchlist.


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