Why Rent-A-Center Inc (RCII) Stock Is Jumping Today

Shares are up about 6% to kick off the week

Rent-A-Center Inc (NASDAQ:RCII) stock is surging Monday after one of its large stakeholders suggested the company sell itself.

Rent-A-Center Inc
Source: Wikipedia

Glenn Welling and firm Engaged Capital said that the company’s best option at the moment is to consider a sale of the whole thing, or even of its parts. Welling and co. hold a 12.9% stake on Rent-A-Center.

The investor said in a securities filing that he has been in talks with the company’s management team and board regarding what the future may hold for it, including some options on how to proceed with the financial difficulties that have struck the company. These include restructuring its capital allocation, strategy and board.

A source close to the matter spoke at length of Rent-A-Center, discussing that it is believed the company is a business with a high cash flow, and a low-growth business. It would work best as a private company, according to the source.

The stock has dipped about 75% over the last two years due to several quarterly earnings reports that underwhelmed, as well as some mistakes that have held the company behind.

One publicly-traded furniture and electronics renting company that could be interested in acquiring Rent-A-Center could be Aaron’s, Inc. (NYSE:AAN). However, it is believed that such a move is not as feasible as investors would like.

RCII shares grew 6% Monday.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2017/01/rent-a-center-inc-rcii-stock/.

©2019 InvestorPlace Media, LLC