Ramius Capital is increasing its investment in the technology sector, in particular in the wireless services firm Immersion Corporation (NASDAQ: IMMR), where it now owns 15% of the equity, having been aggressively buying since August.
Between late August and early October, presumably in some part due to this buying, the price of IMMR rose from $3.75 to $5. It peaked there and headed down again, though, and was back down around $3.75 at the start of this month. In the last three weeks, there has been a rebound, so that at the close of business Monday, Nov. 23, the price of the stock was $4.12.
Instead of trying to give meaning to that zig-zag, I'll move on to another example of Remius' tech buying. They've bought the stock of PC motherboard manufacturer Phoenix Technologies Ltd. (NASDAQ: PTEC). Ramius has added 535,535 PTEC shares to its current holdings, for a total of shares outstanding of 13.4%. Ramius offered to buy PTEC in 2007.
PTEC's stock price took a tumble in mid-October when it announced said its fourth-quarter results. The net loss widened to $5.02 million from $4.57 million in the prior year period. Thomson Reuters had polled three analysts and on average they expected the company to report a loss of $0.06 per share for the quarter. They actual loss per share was $0.15.
Just some wonkish facts for the day. Look for significance elsewhere.
Showing posts with label Ramius Capital. Show all posts
Showing posts with label Ramius Capital. Show all posts
Tuesday, November 24, 2009
Tuesday, May 26, 2009
More on Tollgrade
What exactly do they do?
The company website will tell you that Tollgrade is "a leading provider of service assurance products and services for centralized test systems around the world. Tolllgrade designs, engineers, markets and supports centralized test systems, test access and status monitoring products, and next generation network assurance technologies. Tollgrade's customers range from the top telecom and cable providers, to numerous independent telecom, cable and broadband providers around the world."
What does this mean?
Near as I understand, Tollgrade's equipment allows those telephone companies they service to monitor their lines from a central office, rather than sending repairmen to test wires on location. Its four biggest customers are the regional Bell operating companies: Verizon, BellSouth, SBC, Qwest.
You can find its company history here.
Ramius' complaint is that over the past five years, ending May 13, 2009, Tollgate's stock price is down about 53%. During the same period, the Nasdaq composite is down only 10%.
The problem, in Ramius' view, is a pattern of pouring "excessive amounts of capital into research and development projects as well as ill-conceived and poorly executed acquisitions."
Obviously, R&D is important to a company like Tollgate. Most of its business is devoted to plain old telephone service (POTS), which may soon prove a historic deadend. R&D is essential to adapt the company to the new directions of the telecomm industry.
Still, Ramius presumably would say -- and will say as this dispute roils onward -- that R&D can not be so large a line item as to beggar the here-and-now operational needs of the company.
The company website will tell you that Tollgrade is "a leading provider of service assurance products and services for centralized test systems around the world. Tolllgrade designs, engineers, markets and supports centralized test systems, test access and status monitoring products, and next generation network assurance technologies. Tollgrade's customers range from the top telecom and cable providers, to numerous independent telecom, cable and broadband providers around the world."
What does this mean?
Near as I understand, Tollgrade's equipment allows those telephone companies they service to monitor their lines from a central office, rather than sending repairmen to test wires on location. Its four biggest customers are the regional Bell operating companies: Verizon, BellSouth, SBC, Qwest.
You can find its company history here.
Ramius' complaint is that over the past five years, ending May 13, 2009, Tollgate's stock price is down about 53%. During the same period, the Nasdaq composite is down only 10%.
The problem, in Ramius' view, is a pattern of pouring "excessive amounts of capital into research and development projects as well as ill-conceived and poorly executed acquisitions."
Obviously, R&D is important to a company like Tollgate. Most of its business is devoted to plain old telephone service (POTS), which may soon prove a historic deadend. R&D is essential to adapt the company to the new directions of the telecomm industry.
Still, Ramius presumably would say -- and will say as this dispute roils onward -- that R&D can not be so large a line item as to beggar the here-and-now operational needs of the company.
Sunday, April 12, 2009
Defeat for Ramius
Orthofix International NV has declared victory over the rebels.
Orthofix is a medical device manufacturer, headquartered in Boston, Massachusetts but organized in accord with the laws of the Netherlands Antilles.
At a special general meeting of its shareholders, April 2, the incumbent board members won re-election as against the four nominees of Ramius.
In its statement Thursday, Orthofix said: “The Board of Directors and management team of Orthofix are thankful that shareholders chose to reject the short-term focus of the Ramius proposals, instead voting to support the Company’s long-term strategic plan to deliver shareholder value.”
One of the Ramius proposals was that Orthofix should sell its Blackstone Medical division, a maker of spinal implant products that Othofix purchased in 2006, taking on a heavy debt load in the process.
Before the meeting, Robert Gaines-Cooper had spoken up on behalf of retaining Blackstone. Gaines-Cooper, Group Chairman of Venner Capital SA, said that a spine strategy is crucial to Orthofix' future, and that Blackstone is "poised for a solid 2009 and beyond."
Anyway, the management now has a green light for their spinal strategy. The shareholder vote has presumably strengthened their backbone.
Orthofix is a medical device manufacturer, headquartered in Boston, Massachusetts but organized in accord with the laws of the Netherlands Antilles.
At a special general meeting of its shareholders, April 2, the incumbent board members won re-election as against the four nominees of Ramius.
In its statement Thursday, Orthofix said: “The Board of Directors and management team of Orthofix are thankful that shareholders chose to reject the short-term focus of the Ramius proposals, instead voting to support the Company’s long-term strategic plan to deliver shareholder value.”
One of the Ramius proposals was that Orthofix should sell its Blackstone Medical division, a maker of spinal implant products that Othofix purchased in 2006, taking on a heavy debt load in the process.
Before the meeting, Robert Gaines-Cooper had spoken up on behalf of retaining Blackstone. Gaines-Cooper, Group Chairman of Venner Capital SA, said that a spine strategy is crucial to Orthofix' future, and that Blackstone is "poised for a solid 2009 and beyond."
Anyway, the management now has a green light for their spinal strategy. The shareholder vote has presumably strengthened their backbone.
Sunday, March 1, 2009
Ramius sends letter re: Agilsys
In my lazy Sunday-blogging fashion, I'm just going to copy and paste what I saw on this subject on the Business Wire.
NEW YORK, Feb 26, 2009 (BUSINESS WIRE) -- --Urges Shareholders to Elect New, Independent Director Nominees That Have The Experience Necessary To Oversee A Turnaround Of Agilysys.
RCG Starboard Advisors, LLC, together with Ramius LLC and its other affiliates (collectively, the "Ramius Group" or "Ramius"), today announced that it has sent a letter to the shareholders of Agilysys, Inc. ("Agilysys" or the "Company") (NasdaqGS: AGYS) urging shareholders to elect new, independent director nominees at the Company's 2008 Annual Meeting of Shareholders on March 26, 2009. On June 20, 2008, Ramius nominated three highly qualified director candidates, John Mutch, Steve Tepedino, and James Zierick. Ramius, the second largest shareholder of the Company, is the beneficial owner of approximately 13.0% of the Company's outstanding common shares.
Ramius Partner Mark Mitchell stated, "The current Board of Agilysys must be held accountable for its ineffective oversight of a misguided, poorly executed acquisition strategy and extremely weak operating results which have resulted in significant destruction of shareholder value. Management and the Board have had ample opportunity to address the key strategic and operational issues that have affected Agilysys' performance, but have repeatedly failed to do so. Shareholders cannot afford to let the Company continue to make mistakes and destroy shareholder value."
Added Mitchell, "Immediate and substantial change at the Board level is imperative if a turnaround of Agilysys is to succeed. Our independent, knowledgeable, and highly experienced nominees will work diligently to significantly improve the Company's businesses and create substantial value for all shareholders."
NEW YORK, Feb 26, 2009 (BUSINESS WIRE) -- --Urges Shareholders to Elect New, Independent Director Nominees That Have The Experience Necessary To Oversee A Turnaround Of Agilysys.
RCG Starboard Advisors, LLC, together with Ramius LLC and its other affiliates (collectively, the "Ramius Group" or "Ramius"), today announced that it has sent a letter to the shareholders of Agilysys, Inc. ("Agilysys" or the "Company") (NasdaqGS: AGYS) urging shareholders to elect new, independent director nominees at the Company's 2008 Annual Meeting of Shareholders on March 26, 2009. On June 20, 2008, Ramius nominated three highly qualified director candidates, John Mutch, Steve Tepedino, and James Zierick. Ramius, the second largest shareholder of the Company, is the beneficial owner of approximately 13.0% of the Company's outstanding common shares.
Ramius Partner Mark Mitchell stated, "The current Board of Agilysys must be held accountable for its ineffective oversight of a misguided, poorly executed acquisition strategy and extremely weak operating results which have resulted in significant destruction of shareholder value. Management and the Board have had ample opportunity to address the key strategic and operational issues that have affected Agilysys' performance, but have repeatedly failed to do so. Shareholders cannot afford to let the Company continue to make mistakes and destroy shareholder value."
Added Mitchell, "Immediate and substantial change at the Board level is imperative if a turnaround of Agilysys is to succeed. Our independent, knowledgeable, and highly experienced nominees will work diligently to significantly improve the Company's businesses and create substantial value for all shareholders."
Monday, January 19, 2009
Ramius' white paper
Ramius Capital, an activist hedge fund we have had reason to discuss here before, has put out a white paper, "The Case for Activist Strategies."
I read these things so you don't have to.
Here are five key points from the paper:
1) It traces the recent prevalence of activist strategies in part to Eliot Spitzer. Spitzer successfully pushed for certain reforms back when he was New York's attorney general that had the consequence of pushing professional analysts away from the sell side. Unsurprisingly, those analysts have found another lucrative use for their skill set: on the buy side.
2) A crowding-out effect is observable in the empirical data on this strategy. This is a textbook point: if a business plan works often enough to draw emulation, the emulation will reduce the profitability of that plan. Specifically, "the average benchmark adjusted return attributed to hedge fund activism ... declined during the 2001 to 2006 time period."
3) Many activist investors have had negative results in 2008. This is not, Ramius assures us, a defect in the strategy, "the performance of top-tier managers relative to equity indices has been outstanding."
4) Even in the case of not-so-outstanding results, the authors of the white paper don't want us to fault the strategy, because macroeconomic factors and technical pressures "completely overwhelmed fundamentals [last year], causing companies to trade at or below intrinsic value despite the activist manager's otherwise thoughtful plan to unlock value."
5) When allocating capital to an activist investor, it is a good idea to consider that they aren't all the same, and that the best variants of the strategy for the present climate may be those that push primarily for strategic or operational change (rather than financial or governance changes).
I read these things so you don't have to.
Here are five key points from the paper:
1) It traces the recent prevalence of activist strategies in part to Eliot Spitzer. Spitzer successfully pushed for certain reforms back when he was New York's attorney general that had the consequence of pushing professional analysts away from the sell side. Unsurprisingly, those analysts have found another lucrative use for their skill set: on the buy side.
2) A crowding-out effect is observable in the empirical data on this strategy. This is a textbook point: if a business plan works often enough to draw emulation, the emulation will reduce the profitability of that plan. Specifically, "the average benchmark adjusted return attributed to hedge fund activism ... declined during the 2001 to 2006 time period."
3) Many activist investors have had negative results in 2008. This is not, Ramius assures us, a defect in the strategy, "the performance of top-tier managers relative to equity indices has been outstanding."
4) Even in the case of not-so-outstanding results, the authors of the white paper don't want us to fault the strategy, because macroeconomic factors and technical pressures "completely overwhelmed fundamentals [last year], causing companies to trade at or below intrinsic value despite the activist manager's otherwise thoughtful plan to unlock value."
5) When allocating capital to an activist investor, it is a good idea to consider that they aren't all the same, and that the best variants of the strategy for the present climate may be those that push primarily for strategic or operational change (rather than financial or governance changes).
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