Mar. 11 at 12:27 PM
$KMX Starboard Value announces
$350M stake in CarMax, nominates directors to board
Starboard Value, a significant stockholder of CarMax, announced that it has delivered a letter to Keith Barr, the company's incoming CEO, with a copy to the company's board of directors. Starboard has nominated two individuals - William C. Cobb and Jeffrey C. Smith - for election to the board at the company's 2026 annual meeting of shareholders. The letter said, in part, "Congratulations on your appointment as President and Chief Executive Officer of CarMax. We believe you are stepping into this role at an opportunistic time for value creation and are excited for your impending impact. Starboard Value LP is one of the largest shareholders of CarMax, Inc, with approximately a
$350 million investment.
We believe CarMax is well positioned with a differentiated omnichannel model that should offer a better value proposition than peers. However, as you know, the Company's recent performance has fallen well short of its underlying potential. We believe these problems are fixable. As such, we are excited about your appointment as CEO and believe you will be a positive catalyst for change. We wanted to share our perspective on the business and several key opportunities as you prepare to assume your new role. This letter summarizes the areas where we believe focused execution can drive improvement. We recognize that you have not formally started and are not currently taking meetings.
When the timing is appropriate, we would welcome the opportunity to engage directly and collaboratively to share more information and observations. At its core, CarMax's model is straightforward: the Company buys cars, reconditions them, sells them, and supports those activities by providing financing, warranties, and related services. When buying, fixing, and selling are executed well, the model creates a powerful flywheel in which higher volumes drive lower unit costs, enabling more competitive pricing and further share gains. Importantly, realizing the full potential of this flywheel requires consistent execution across all aspects of the business: buying, reconditioning, selling, and cost management."
