Dollar Tree Is Selling Family Dollar. But What Does That Mean for Dollar General Investors?
Dollar Tree (NASDAQ: DLTR) bought competitor Family Dollar in 2015. Now, it's selling the chain to a pair of private equity firms at a steep loss. Weirdly, the sale could result in competitor Dollar General (NYSE: DG), still a standalone business, being the big winner from the transaction.One of the ways that a company can destroy shareholder value is by acquiring other businesses that turn out to be worth considerably less than their purchase prices. Some Wall Street insiders cynically call this process "di-worse-ification." Sometimes, this questionable strategy is driven by a CEO who is hell-bent on building an empire, no matter the cost. Other times, companies are simply trying to find new avenues for growth, and their hopeful efforts just don't pan out as well as they expected.Image source: Getty Images.Continue reading
Dollar Tree (NASDAQ: DLTR) bought competitor Family Dollar in 2015. Now, it's selling the chain to a pair of private equity firms at a steep loss. Weirdly, the sale could result in competitor Dollar General (NYSE: DG), still a standalone business, being the big winner from the transaction.
One of the ways that a company can destroy shareholder value is by acquiring other businesses that turn out to be worth considerably less than their purchase prices. Some Wall Street insiders cynically call this process "di-worse-ification." Sometimes, this questionable strategy is driven by a CEO who is hell-bent on building an empire, no matter the cost. Other times, companies are simply trying to find new avenues for growth, and their hopeful efforts just don't pan out as well as they expected.
Image source: Getty Images.
![How to Find Low-Competition Keywords with Semrush [Super Easy]](https://static.semrush.com/blog/uploads/media/73/62/7362f16fb9e460b6d58ccc09b4a048b6/how-to-find-low-competition-keywords-sm.png)
