What happened

Shares of Dollar Tree, Inc. (NASDAQ:DLTR) finished higher today on news that activist investor Carl Icahn had taken a stake in the discount retailer. The stock jumped around noon on a report from The New York Post and ended the day up 6.8%.

So what 

There was little detail in the Post story,  which said that Icahn's plans for Dollar Tree weren't immediately clear. Icahn is familiar with the business, having taken an activist stake in Family Dollar in 2014 and urging it to sell itself. That move provoked a bidding war between Dollar Tree and Dollar General (NYSE:DG), with Dollar Tree emerging as the winner. 

However, Dollar General has outperformed its rival since the deal closed.

A shopping cart in an aisle at a discount store

Image source: Getty Images.

Now what 

Icahn could push for cost-cutting, a change in management, or a new strategy, though a full-on sale seems unlikely this time, since Dollar General is the only other large dollar-store chain remaining in the market. Still, it's clear why investors would be excited by the billionaire investor's taking a stake in the company. Icahn has an enviable track record. He made billions after betting on Netflix when the stock was out of favor in 2012 following the so-called Qwikster debacle, and he proved victorious over fellow activist investor Bill Ackman in a years-long battle over Herbalife, after Ackman took a high-profile short position in the health-supplement company.

Icahn's next move with Dollar Tree is anyone's guess, but expect volatility in the stock as he makes his influence felt.

Jeremy Bowman owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.