Starboard takes CarMax stake and nominates two directors

Starboard Value has acquired a stake in CarMax, Inc. valued at approximately $350 million and has nominated two candidates to the company's board of directors. The activist investor is proposing Bill Cobb, the chief executive of Frontdoor, Inc., and Jeffrey Smith, Starboard’s founder and CEO, to join the current nine-member board. Starboard is urging the used car retailer to enhance its digital user experience, implement cost-cutting measures, and revise its pricing structure.

Operating as the largest used car retailer in the United States, the company generates more than $26 billion in annual revenue through its omnichannel platform. Despite its scale, the company's stock price has declined 43% over the past 12 months, closing at $42.14 on Tuesday. The news of the stake was first reported by Bloomberg.