S. Robson "Rob" Walton, the oldest son of founder Sam Walton who served as chairman of the company from 1992 to 2015, has made news with the sale of a small amount of his share in the company. Walton is still on the company’s board.
Last Wednesday, Walton sold 646,330 shares at $80.2025 per share (or $51.8 million), and Thursday he sold 129,628 shares at $80.4406 per share (or $10.4 million), reported CNBC, which reviewed the company’s filings with the Securities and Exchange Commission. He retains 106.3 million shares with a present value of nearly $8.4 billion, according to the report.
In another high-profile sell-off of Walmart stock, billionaire investor Warren Buffet, who is famous for his often prescient investments, in February sold off most of his Walmart shares and put much of the proceeds into the airline industry.
Considering that Rob Walton is keeping most of his vast holdings in the company his father founded, it’s highly likely that his withdrawal was akin to a trip to the bank.
But any time a large or prominent investor sheds a significant amount of stock, speculators wonder whether that is a sign of a loss of faith. Since its acquisition of Jet a year ago, Walmart has thrown itself into an acquisition spree that marks not just a belated embrace of e-commerce, but also a departure from its core strength of uber-efficient, brick-and-mortar-based distribution of goods.
And Amazon just took over Whole Foods and has promptly slashed prices, providing Walmart, the country’s largest grocer, yet another competitor on its "always low prices" turf. That led David Seaburg, equity sales trader at Cowen and Co. to tell CNBC's "Trading Nation" last week that Amazon has Walmart "under siege."
In fact, the swift takeover of the organic grocer by Amazon managed to once again shove aside Walmart news. The acqusition was first announced the same day that Walmart announced its purchase of menswear site Bonobos and last week's news of Amazon’s price reduction and Prime membership plans for Whole Foods stole attention from Walmart’s new partnership with Google, an answer to Amazon's Alexa voice assistant. At the very least, it's a war for the public's attention.
"Amazon has wasted no time integrating Whole Foods into its operation, and starting Monday the grocery landscape [changed] radically, as Amazon gains 460 stores and Whole Foods gains access to 85 million Amazon Prime members," Jeff Ketner, president of Ketner Group PR and Marketing, told Retail Dive in an email. "It’s a dream scenario for Prime customers, a nightmare for other grocery retailers. Amazon’s timing with this announcement is pitch-perfect, as it overshadows Wednesday’s Walmart-Google announcement."
Amazon isn't Walmart's only challenge. Many analysts are wary of encroaching competition from no-frills grocery stores Aldi and Lidl, which are expanding in the U.S. and which have given Walmart a run for its money in the U.K. and elsewhere. The situation leaves Walmart and its competition with intense price restraints at the same time they're ramping up their higher-cost e-commerce operations.