Activist Stocks: Profiting from private information

Activist friend, another lightish day, activist related news and stories for June 9 below - as usual the free newsletter is on a 24-hour delay; Activist Strategy subscribers get it on publication day [you can get a 2-week free trial here]. Tip us off at @activiststocks and here’s the free daily newsletter sign up.

News-

  • Marcato Capital made an agreement with Sotheby’s, which will allow it to view the Redacted Pages from the 2014 Third Point settlement in a confidential manner.

  • Osmium Partners, the activist involved in Rosetta Stone, owns 9.7% and supports the buyout - pushing for a price of $16 a share. Close to double the stock price.

  • GAMCO has decided to put forth four nominees for the Pep Boys board.

  • Starboard Value dumps some Micrel shares. The first transaction since going active in August 2014. Reduces its stake by nearly 30%, but still owns 8.9% of the company. Shares are up 30% since going active.

Stories-

  • @drinkcircle pens a piece for the Times of India about Eros, where Knight Assets (owning 3% of the company) has forced Eros to put its TV foray on hold. Instead, getting Eros to build a digital streaming service. It’s put its TV business on hold for at least a year. The focus now is on accelerating customer acquisition for its Netflix-style subscription platform [link]

  • @matt_levine at Bloomberg talks about the SEC investigation of activist hedge funds. Of note, “Activists want to be able to profit from their private information; less informed investors would prefer that the activists share...Cutting down on those opportunities is a little weird for corporate democracy: Shareholders can vote, but they're afraid to talk to each other about how they'll vote” [link]

  • @EricSylvers at WSJ puts a piece together a piece on how Chrysler hired activists to force a merger with GM. Fiat chief has noted that the “GM liquidity would be better spent on boosting scale rather than buying back shares..Ms. Barra’s willingness to work with activists suggests another investor could lure GM again to the negotiating table” [link]

What we’ve been working on-

Bulldog Investors works its turnaround at Hill International [partial paywall]