Activist lovers and friends,
Things are out of control. You’re know what I mean in just a bit. In any case, nice blend of news and stories today; see below. Shoot us tips on Twitter at @activiststocks or via email.
Canyon Distressed Opportunity Fund likes the backdrop for credit
The Canyon Distressed Opportunity Fund III held its final closing on Jan. 1 with total commitments of $1.46 billion, calling half of its capital commitments so far. Canyon has about $26 billion in assets under management now. Q4 2020 hedge fund letters, conferences and more Positive backdrop for credit funds In their fourth-quarter letter to Read More
- Alliance Trust rejected Elliott Management’s three nominees for its board.
- The @muddywatersre target, NQ Mobile, added Chun Ding to its board. Chun is the ChinaRock Capital Management co-founder, and recall before that he spent nearly a decade with Thomas Steyer’s Farallon Capital. CRCM owns just under 10% of NQ Mobile as of Jan. Shares of NQ Mobile are down 85% since Muddy put out its first hit piece. The stock’s at $3.80 a share, which is well below the $9.80 buyout offer from Bison Capital that it rejected last summer.
- Steel Partners continues its selloff of Nathans Famous. Its now taken its stake from 445K shares down to 295K — owning roughly 6.6% of the hot dog company. The investment fund has made a heck of profit on the company, having owned shares for over a decade with a sub $3.50 a share cost basis.
- Stadium Capital cut its Insperity stake again, now owning 1.57M shares. That’s down from the 2.43M it owned heading into 2015. Stadium is booking profits, with the stock up 60% year-to-date. Starboard Value is also active here, owning 3.3M share — about 13% of the company. Recall that Stadium is in a heated battle with Big 5 Sporting Goods, where its been a shareholder since 2011. It recently waged a proxy battle there, here’s a chopped & screwed version of Stadium’s latest letter [link]
- Things are pretty bad out there guys. I mentioned the other day that investors of nearly every underperforming company (hell, in some cases it doesn’t even have to be underperforming) are calling for activist intervention. In just the last few days, the likes of General Electric and United Technologies have both been cited as activist targets. Granted underperformance is a starting point for screening for activist targets, you still have to at least have some value that can be unlocked. Now there’s @louwhiteman over at The Deal, he’s calling out Tesla as an activist target. When I saw the title, “Why Tesla needs an activist spark to ease growing investor anxiety,” I thought for sure that Ashton Kutcher was the author. MTV had bought The Deal and Punk’d was finally back, just in print version. Not the case, as Lou is dead serious. Lou’s activist thesis: Tesla needs to dump its plans to become the General Motors of EVs, which would save it billions on manufacturing and engineering costs. Rather, it should use its Gigafactory and world famous batteries to expand beyond powering autos. I think what Lou means is that we need an activist to get involved just to unlock enough value to justify the current market cap [link]
- An oldish story, but @sudecker1 at Bloomberg brings a new take on Kyle Bass’ attempt to usurp the patent troll throne. The focus here is on Ferrum Ferro Capital, which is specifically targeting Allergan. The natural question becomes, how do you monetize patent challenges and patent invalidations? [link]
- @valuewalk puts out a piece on hedge fund returns for Feb. No surprise, activist funds led the pack among strategies, up 5.37% for the month of Feb. Long/short strategy wasn’t too far behind with a 3.4% gain. All the key strategies were positive for Feb., but all also underperformed the S&P 500 for the month, which was up 5.75%. Final point, monies continue to flow out of long/short funds into broad multi-strategy funds [link]
- @m_delamerced at DealBook sat through a riveting speech by SEC chief Mary Jo White in New Orleans yesterday. The key takeaway being that White supports activists. Per Mike, White said that activist tactics “can be compatible with the kind of engagement that I hope companies and shareholders can foster.” What we really need is an activist intervention at the SEC. I think @mcuban would agree with that [link]