13Ds are filed with the Securities and Exchange Commission within 10 days of an entity’s attaining a greater than 5% position in any class of a company’s securities. Subsequent changes in holdings or intentions must be reported in amended filings. This material has been extracted from filings released by the SEC from Nov. 28 through Dec. 4, 2019. Source: InsiderScore.com
Marathon Partners revealed that it owned 3,897,700 shares of the cosmetics retailer, a 7.8% interest in the company. That position accounts for the sale of 110,000 shares during the span of Nov. 12 through Nov. 25 at per share prices of $16.71 to $17.56.
Marathon had previously addressed an email to e.l.f.’s CEO, citing its dissatisfaction with the stagnation in the retailer’s recent earnings, held back in part by “high levels of SG&A and compensation that have prevented profit growth.”
Marathon concluded its message by stating that a sale of e.l.f. was the best option to stoke shareholder value. On Dec. 3, Marathon again reached out to e.l.f., reiterating that a sale of the company was the only plausible route to raise shareholder value, as Marathon believes that e.l.f.’s “strategy to grow its core brand and build a multibrand platform in the cosmetics space has failed to create additional shareholder wealth as originally envisioned.”
Alden Global Capital disclosed owning 11,544,213 shares of the newspaper operator on Dec. 2, equal to 32% of the tradable stock. Alden and Tribune Publishing entered a cooperation agreement on Dec. 1 where Tribune Publishing increased the size of its board to eight directors from six to accommodate the appointment of two Alden representatives.
The agreement further stipulates that Tribune Publishing will not increase the board above eight members from Dec. 1 to the end of June 2020. During that same period, if Alden’s interest in Tribune falls below 10%, the two Alden Capital directors will be required to step down from the board.
The agreement also calls for Alden Capital to adhere to customary standstill provisions and not own more than 33% of Tribune’s tradable stock through the end of June 2020. Lastly, the cooperation agreement will be voided if Alden’s two designated directors fail to be nominated or elected at the 2020 annual shareholder meeting.
Magnetar Financial reported an initial position in the electronics manufacturer of 3,046,835 shares, equal to 5.4% of the outstanding stock. That stake includes the purchase of 3,045,019 shares from Oct. 2 through Nov. 20 at prices ranging from $17.99 to $26.50 each, as well as the sale of an immaterial amount over the same span. No reason was given for the investment, though Kemet announced on Nov. 11 that it had agreed to be acquired by Taiwan-based Yageo for $1.8 billion in cash, valuing each Kemet share at $27.20 apiece. The deal is expected to close in the second half of 2020, subject to regulatory approval.
Increases in Holdings
Greenhaven Road Capital, citing that the stock was an attractive investment, reported a higher stake in the cloud-based marketing-services provider of 1,360,821 shares. That amount accounts for the purchase of 277,778 shares acquired on Nov. 22 at $9 apiece through a purchase agreement with SharpSpring, giving Greenhaven Road a 12.4% stake in the company.
Greenhaven Road also revealed that its founder, Scott Miller, has joined SharpSpring’s board. Miller has had and “may continue to have discussions with” SharpSpring regarding a myriad of strategic and operational topics.
Decreases in Holdings
JANA Partnerslowered its stake in the casual-dining chain “for portfolio-management purposes following the appreciation of [Bloomin’ Brands’] stock price.”
From Nov. 6 to Dec. 4, JANA sold a total of 1,440,575 shares at prices ranging from $22.62 through $23.83 apiece. It now holds 6,379,324 common shares, a 7.3% interest in Bloomin’ Brands.
JANA revealed that it supports Bloomin’ Brands “announcement of a strategic review…and intends to continue to engage” the company regarding its analysis of alternatives, including the possible sale of Bloomin’ Brands.
(BX), through its wholly owned affiliate GSO Funds, revealed that it had “zeroed out” its position in the imaging and printing company. Without citing a reason, GSO exited its entire stake of 8,875,211 shares through a private sale transacted on Dec. 3 at $2.50 per share.
Spectrum Brands Holdings
Affiliates of the Fortress Investment Group (FIG) reduced their collective stake in the household-products maker to 3,855,401 shares. On Nov. 22, Fortress’ subsidiaries sold 1,007,491 shares at $61.80 apiece, leaving Fortress holding 7.9% of Spectrum’s outstanding stock.
Axonics Modulation Technologies
Andrea Partners reported a smaller interest in the medical-device company of 9.8%. Through a public offering that closed on Nov. 22, Andrea Partners sold 300,000 shares at the offering price of $20.74 each. Following the sale, Andrea Partners now owns 3,257,461 of Axonics’ common shares.
Elliott Management revealed a lower stake in the enterprise information-technology services provider of 6,400,000 shares, a 4.9% position. Those figures include the economic exposure to 1,100,000 shares tied to cash settled swap contracts. The reduced holding resulted from the sale of 791,000 shares “for portfolio-management purposes” during the three days of Nov. 25 through Nov. 27 at prices of $113.12 to $114.31 each. Elliott Management noted that a representative remains on Citrix’s board.
The Activist Spotlight
Howard Hughes (HHC)
Business: Real estate investment and development company.
Stock Market Value: $4.9 billion ($113.96/share)
What’s Happening: Pershing Square increased its beneficial ownership to 14.8%.
$2 billion: the minimum amount of noncore assets Howard Hughes plans to sell in the next 18 months
$50 million: the amount by which Howard Hughes plans to cut overhead by 2021
Behind the Scenes: Pershing Square initiated its position in Howard Hughes in 2010 when it was spun off from
General Growth Properties,
and has owned a significant position ever since. Moreover, Bill Ackman has been the company’s chairman since then and has been intimately involved in every material decision the company has made. Howard Hughes recently explored a sale of the company but decided instead to implement a transformation plan that includes a new CEO; the sale of noncore assets; the continued investment in its master planned communities, or MPCs; a cost cutting initiative; and refocusing on operations and generating free cash flow.
In addition to the South Street Seaport, which Howard Hughes intends to own long term, it has four MPCs with over 50 million square feet of developable capacity remaining. Successful MPC owners create significant value over time because they control the supply of land to the market and take a longer-term approach. The best example of this is Donald Bren’s privately held Irvine Co., where he turned a $337 million investment in 1977 to a net worth of $17 billion today by never selling and continually developing with a long-term vision.
The 13D Activist Fund, a mutual fund run by an affiliate of the author and not connected to Barron’s, has a long position in Howard Hughes. In addition, the author publishes and sells 13D research reports, whose buyers may include representatives of participants in, and targets of, shareholder activism.
Email: [email protected]