Engaged Capital has gone active on MagnaChip Semiconductor with a 7.3% stake.
It peeled the idea from Pleasant Lake Partners, which went active last month with a 9.9% stake. Our thoughts are in Activist Strategy. Engaged says the core assets and semiconductor products business are attractive to potential strategic acquirers and/or partners.
The company has been through a financial restatement process and still trades at a discount given that overhang.
Recall that in early 2014, the company’s audit committee announced that it incorrectly recognized revenue in 2011, 2012, and 2013, leading to a yearlong restatement process that wasn’t completed until this February.
When the restatement was finally completed, and the company finally released its 2014 earnings, shares dropped 40%.