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CATALYST EQUITY RESEARCH REPORT ™ Weekly Research Highlighting Activist Investments
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Hedge Fund Solutions, LLC © 2003 – 2017 Page 2 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
HIGHLIGHTING ACTIVIST INVESTMENTS
Week Ending February 10, 2017
SYMBOL COMPANY INVESTOR
ABCO The Advisory Board Co Elliott Associates
ADSK AutoDesk, Inc. Sachem Head & Eminence Capital
ALSN Allison Transmission Ashe Capital
ARNC Arconic, Inc. Elliott Associates
BANC Banc of California PL Capital
BWLD Buffalo Wild Wings Marcato Capital
CBR Ciber, Inc. Legion Partners; Lone Star Partners
CTSH Cognizant Technology Elliott Associates
DECK Deckers Outdoor Corp Marcato Capital
DSPG DSP Group Raging Capital
EXAR Exar Corp Simcoe Capital
FCE-A Forest City Realty Scopia Management
FRGI Fiesta Restaurant Group JCP; Bandera; Radoff; Schechter
IMMR Immersion Corp VIEX Capital
KEF Korea Equity Fund Bulldog Investors
MCHX Marchex, Inc. Edenbrook Capital
PRGO Perrigo Company Starboard Value
QTM Quantum Corp VIEX Capital
RAS RAIT Financial Trust Highland Capital
RTK Rentech Inc. Raging Capital
STLY Stanley Furniture Co Hale Capital
HEDGE FUND SOLUTIONS (HFS) provides investment research, strategy and stakeholder communications consulting to companies and
investors interested in, or involved with, shareholder activist campaigns. Since 2001 HFS has become the trusted advisor to numerous
institutional investors, CEOs and board members worldwide. HFS also administers The Official Activist Investing Blog™, the definitive source for activist shareholder information.
Catalyst Investment Research™ is a portfolio of activist investing research products that combine company-specific shareholder activism
research with deep value investment analysis and access to industry insiders.
HEDGE FUND SOLUTIONS’ PORTFOLIO OF ACTIVIST INVESTING RESEARCH INCLUDES:
Daily Email Alerts
Weekly Summary of Activist Investments
Quarterly Buying Analysis of Top 50 Activist Investors
Company-Specific Shareholder Activism Analysis (combining shareholder activism & deep value company analysis)
Special Reports on Activist Investing
400+ Page Shareholder Activism Report & Regularly Updated Shareholder Activism Resource Portal
To Learn More: Download a brochure http://www.hedgerelations.com/CIR/CIR%20Brochure.pdf
Hedge Fund Solutions, LLC © 2003 – 2017 Page 3 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
The Advisory Board Company (ABCO)
Activist Investor: Elliott Associates
Investor Info Catalyst Info
Shares 988,500 Catalyst: On February 9 2017 Elliott disclosed it has increased its stock ownership from 2.5% to 4.1% while still
maintaining an overall economic exposure of 8.3% (i.e. 4.2% options)
Comment: We initially covered ABCO on January 11, 2017 when Elliott disclosed an 8.3% stake in ABCO through stock
(2.5%) and options (5.8%).
On February 6, 2017 ABCO announced plans to explore strategic alternatives
Legal counsel to Elliott Associates
% Outstanding 2.5%
Cost Basis Not Avail
Company Info
Share Price 47.25
Revenue 805M
Market Cap 1.9B
Enterprise Value 2.4B
Net Cash -510M
EBITDA 116M
52 wk. range 18.87 – 51.23
EV/EBITDA 20.4
Autodesk, Inc. (ADSK)
Activist Investor: Sachem Head and Eminence Capital
Investor Info Catalyst Info
Shares 25,969,213 Catalyst: On February 7, 2017 ADSK entered into a settlement agreement with Sachem Head to replace the CEO.
https://www.sec.gov/Archives/edgar/data/769397/000092189517000208/ex997sc13da410692002_020717.htm
Comment: We initially covered ADSK on November 4, 2015 when Sachem Head disclosed a 5.7% "active" stake through
stock and options.
At the time ADSK’s CEO said, “I don’t think these guys care one bit about return on investment. I think active
investors, as the name suggests of their behavior, they are here for a short hit,” He continued, “You could cut
every expense in almost every technology company and get better returns for the short term, and I would almost
guarantee you would have no long-term future.”
Sachem Head (5.7%) and Eminence Capital (5.8% at an avg. $47.31/sh) formed a group to discuss ADSK and
engage with the board
On March 11, 2016 ADSK entered into a settlement agreement with Sachem Head and Eminence Capital to
appoint three new directors to a 13-person board which will be reduced to 11-members after the annual
meeting.
http://www.sec.gov/Archives/edgar/data/769397/000095014216003312/eh1600392_ex9904.htm
Legal counsel to Eminence Capital
% Outstanding 11.5%
Cost Basis Not Avail
Company Info
Share Price 83.23
Revenue 2.5B
Market Cap 18.4B
Enterprise Value 16.0B
Net Cash 2.5B
EBITDA N/A
52 wk. range 43.01-85.11
EV/EBITDA N/A
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 4 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Allison Transmission (ALSN)
Activist Investor: Ashe Capital Management
Investor Info Catalyst Info
Shares 10,031,115 Catalyst: On February 7, 2017 ALSN entered into a settlement agreement with Ashe Capital to appoint an Ashe
representative if a ValueAct or Longview Asset Management's representatives are not re-nominated at the 2017
or 2018 annual meetings
https://www.sec.gov/Archives/edgar/data/1411207/000090266417000805/p17-0578exhibitd.htm
Comment: We initially covered ALSN on December 15, 2014 when the Company entered into a cooperation agreement
with ValueAct (10.77%) providing them the option to add 1 rep to the board.
http://www.sec.gov/Archives/edgar/data/1411207/000119312514442023/d837700dex991.htm
On May 15 VA exercised its option to add one representative to ALSN's board.
https://finance.yahoo.com/news/allison-transmission-adds-gregory-spivy-200100740.html
On November 6, 2015 Ashe Capital requested that one of its representatives join the company's board
Ashe formally nominated one individual to the board and submitted three shareholder proposals: (i) Declassify
the board, (ii) Adopt a majority vote standard, and (iii) proxy access.
Ashe Capital withdrew its nomination notice after ALSN announced several corporate governance
enhancements, the addition of two new directors and the board’s stated intention to nominate another
stockholder to the Board.
https://finance.yahoo.com/news/allison-transmission-provides-2016-annual-203700575.html
Legal counsel to Ashe Capital
% Outstanding 5.9%
Cost Basis 29.14
Company Info
Share Price 37.08
Revenue 1.8B
Market Cap 6.2B
Enterprise Value 8.1B
Net Cash -1.9B
EBITDA 627M
52 wk. range 22.22 – 37.82
EV/EBITDA 12.9
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 5 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Arconic, Inc. (ARNC)
Activist Investor: Elliott Associates
Investor Info Catalyst Info
Shares 52,546,174 Catalyst: ARNC launched a website to communicate with shareholders regarding the 2017 annual meeting
www.arconic.com/global/en/investors/annual-meeting.asp; ARNC issued a press release from its independent
directors unanimously supporting the company's CEO. ARNC also issued a press release questioning Elliott's
grasp of its business, highlighting Elliott's shifting data and valuation. Elliott sent a letter to the board
questioning the CEO's track record.
Comment: We initially covered ARNC on November 4, 2016 when Elliott disclosed a combined economic exposure to 9%
of ARNC and stated that, following the recent separation from Alcoa, the stock is dramatically undervalued.
On November 15, 2016 Elliott increased its economic exposure from 9% to 10% including Stock, currently
exercisable Options and other Derivatives.
On December 8, 2016 Elliott increased its economic exposure from 10% to 11.1%
On January 25, 2017 Elliott increased its economic exposure in ARNC to 12.0% (10.3% stock and 1.7%
derivatives)
On February 1, 2017 Elliott sent a letter to shareholders detailing its dialogue with the company to-date,
explaining the need for change, outlining the scope of opportunity, introducing its candidate for CEO, and
introducing its five nominees
https://www.sec.gov/Archives/edgar/data/4281/000092189517000133/dfan14a10168012_02012017.htm
Strategy & Communications to Arconic
Legal counsel to Elliott Associates
% Outstanding 12.0%
Cost Basis Not Avail
Company Info
Share Price 29.62
Revenue 21B
Market Cap 12.4B
Enterprise Value 18.2B
Net Cash -9B
EBITDA 1.5B
52 wk. range 16.75 – 29.85
EV/EBITDA 12.1
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 6 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Banc of California (BANC)
Activist Investor: Legion Partners/CalSTRS
Investor Info Catalyst Info
Shares 3,129,179 Catalyst: On February 7, 2017 Legion nominated two candidates for election to the board
On February 10, 2017 BANC entered into a cooperation agreement with PL Capital and added one
representative from PL Capital to the board
https://www.sec.gov/Archives/edgar/data/1169770/000089706917000084/cg858995.htm
Comment: We initially covered BANC on June 9, 2014 when PL Capital disclosed a 7.1% "active" stake and sent a letter
to the CEO outlining its concerns.
On November 3, 2015 PL Capital sent a letter to BANC with questions they couldn't ask during the quarterly
conference call, including how to start to eliminate the bank's discount.
On November 30, 2015 PL Capital sent a letter to BANC's lead director requesting the company fully disclose
the Chairman/CEO's involvement with GPS Partners, and investment firm he co-founded and was the subject of
a SEC cease and desist order relating to securities violations.
On December 15, 2015 PL Capital submitted a shareholder proposal seeking support for Majority Voting for
Directors http://www.sec.gov/Archives/edgar/data/1169770/000089706915000550/cg649ex8.pdf
On September 12, 2016 PL Capital sent a letter to BANC expressing disappointment in the board's refusal to
meet with them.
https://www.sec.gov/Archives/edgar/data/1169770/000089706916001029/cg801ex9.pdf
On October 24, 2016 PL Capital increased its ownership from 4.8% to 6.7% and sent a letter to BANC
demanding a thorough investigation into any potential improprieties involving management and the board.
https://www.sec.gov/Archives/edgar/data/1169770/000089706916001088/cg816992.pdf
On December 16, 2016 PL Capital (6.9% at an average cost of $12.35/share) announced it has nominated two
individuals for election to the board
On January 23, 2017 Legion/CalSTRS disclosed a 6.3% stake in BANC and expressed serious concern with the
company's corporate governance, including the extent of related party transactions. Legion/CalSTRS suggest
the board add new directors, hire an independent financial advisor and form a special committee to consider
all strategic alternatives, including a sale.
Legal counsel to Legion Partners/CalSTRS
% Outstanding 6.3%
Cost Basis Not Avail
Company Info
Share Price 19.90
Revenue 561M
Market Cap 993M
Enterprise Value 1.1B
Net Cash -300M
EBITDA N/A
52 wk. range 10.93 – 23.24
EV/EBITDA N/A
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 7 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Buffalo Wild Wings, Inc. (BWLD)
Activist Investor: Marcato Capital
Investor Info Catalyst Info
Shares 950,000 Catalyst: On February 6, 2017 Marcato nominated four candidates for election to the board and issued a press release
outlining several issues that have plagued the company
https://www.sec.gov/Archives/edgar/data/1062449/000091412117000145/ma36561311-ex99_2.htm
Comment: We initially covered BWLD on July 25, 2016 when Marcato disclosed a 5.1% "Active" stake in BWLD
On August 16, 2016 Marcato sent a letter and presentation to BWLD's CEO outlining several recommended
changes, including (i) introduce fresh talent at the board and management level, (ii) apply greater focus on
operational excellence, (iii) cease "emerging brands" growth plan, (iv) increase urgency, follow-though and
accountability, (v) audit managerial decision tools and a reconciliation of business outcomes as compared to
forecasts. https://www.sec.gov/Archives/edgar/data/1062449/000091412116001415/ma20160815-sc13da1.htm
On August 25 Marcato issued a presentation which includes Marcato's observations of BWLD's 2016 Analyst
Day. https://www.sec.gov/Archives/edgar/data/1062449/000091412116001427/ma35818487-sc13da2.htm
On October 11, 2016 BWLD added three new directors to the board without engaging with Marcato, despite
Marcato's attempt to discuss the board's composition for months.
On October 13, 2016 Marcato sent a letter to BWLD's Board demanding to obtain the Company's shareholder
list which was initially requested on August 22, 2016.
https://finance.yahoo.com/news/marcato-sends-letter-buffalo-wild-201800826.html
On December 6, 2016 Marcato sent a letter to BWLD franchisees expressing concern over management's lack
of urgency, and suggested that substantial value can be created with a redesigned business strategy, which
includes the franchise business model. Www.WinningAtWildWings.com
% Outstanding 5.2%
Cost Basis Not Avail
Company Info
Share Price 159.55
Revenue 1.9B
Market Cap 2.9B
Enterprise Value 2.9B
Net Cash -160M
EBITDA 297M
52 wk. range 122.25 – 175.10
EV/EBITDA 9.8
Ciber, Inc. (CBR)
Activist Investor: Legion Partners
Investor Info Catalyst Info
Shares 12,234,812 Catalyst: On February 8, 2017 Legion increased its ownership to 14.99%
On February 9, 2017 Lone Star increased its ownership to 5.4%
Comment: We initially covered CBR on February 27, 2015 when Lone Star Value announced it had nominated three
director candidates to the board and issued a press release criticizing the board’s poor performance, corporate
governance and compensation practices.
http://www.sec.gov/Archives/edgar/data/918581/000092189515000515/dfan14a09482005_02272015.htm
On April 2, 2015 three CBR directors resigned and the Company agreed to add Bobby Stevenson (8.3%
shareholder) and two additional directors to a reconstituted board.
http://www.sec.gov/Archives/edgar/data/918581/000119312515118128/d901294dex991.htm
On May 3, 2016 Legion Partners disclosed a 6.7% "active" stake in CBR
On June 3, 2016 Legion increased its ownership from 6.7% to 8.4%
On June 21, 2016 Legion increased its ownership to 9.99%
On November 21, 2016 Legion increased its ownership to 12.01%
Legal counsel to Lone Star Value
% Outstanding 14.99%
Cost Basis 1.42
Company Info
Share Price 0.36
Revenue 680M
Market Cap 29M
Enterprise Value 66M
Net Cash -33M
EBITDA -37M
52 wk. range 0.36 – 2.82
EV/EBITDA Negative
Hedge Fund Solutions, LLC © 2003 – 2017 Page 8 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Cognizant Technologies Solutions (CTSH)
Activist Investor: Elliott Associates
Investor Info Catalyst Info
Shares ~24,270,000 Catalyst: On February 9, 2017 CTSH entered into an agreement with Elliott to appoint three new directors and form a
financial policy committee to advise the board on issues relating to the Company's operating plan and capital
allocation.
https://www.sec.gov/Archives/edgar/data/1058290/000105829017000004/earningsrelease123116.htm
Comment: We initially covered CTSH on November 28, 2017 when Elliott disclosed a 4% stake and sent a letter to the
Board outlining several value creating actions that could get the stock up to $80-$90 per share by the end of
2017 http://elliottletters.com/assets/downloads/2016-11-28_Cognizant-Letter.pdf
% Outstanding ~4%
Cost Basis Not Avail
Company Info
Share Price 57.40
Revenue 13.3B
Market Cap 35B
Enterprise Value 30B
Net Cash 4.0B
EBITDA 2.6B
52 wk. range 45.44 – 63.23
EV/EBITDA 11.44
Deckers Outdoor Corp (DECK)
Activist Investor: Marcato Capital
Investor Info Catalyst Info
Shares 1,710,179 Catalyst: On February 8, 2017 Marcato disclosed a 6% stake in DECK % Outstanding 6.0%
Cost Basis 45.95
Company Info
Share Price 52.10
Revenue 1.8B
Market Cap 1.7B
Enterprise Value 1.3B
Net Cash 234M
EBITDA 215M
52 wk. range 44.00 – 69.94
EV/EBITDA 6.2
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 9 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
DSP Group (DSPG)
Activist Investor: Raging Capital
Investor Info Catalyst Info
Shares 1,588,078 Catalyst: On February 10, 2017 Raging Capital increased its ownership to 7.3%
Comment: We initially covered DSPG in several Catalyst Research Reports starting in 2011 when Starboard disclosed a
6.0% “active” stake and subsequently increased it to 10.2%.
On August 22, 2011 Starboard sent a letter to the Company expressing its belief that the shares were deeply
undervalued.
On April 4, 2012 DSPG entered into a settlement agreement with Starboard. Under the terms of the agreement
DSPG increased the size of the board from 8 to 9 members and nominate two new members- Ken Traub and
Tom Lacey, for election.
On March 13, 2013 Starboard nominated 4 individuals for election to DSPG’s board.
On May 14, 2013 Nokomis Capital, a 6.3% shareholder, publicly supported Starboard
On May 21, 2013 DSPG announced plans to declassify its board structure and a new Chairman will be
appointed in 2014 (both actions are subject to a board vote which has not yet taken place).
On June 6, 2013 Roumell Asset Management (4.5%) publicly disclosed its support for Starboard
On June 10, 2013 Starboard won 2 of 3 board seats at DSPG’s June 10, 2013 annual meeting.
2016: Starboard no longer owns DSPG.
On July 6, 2016 Raging Capital disclosed a 5.4% ownership stake in DSPG group. Ken Traub (a DSP board
member) joined Raging Capital as a Managing Partner in January 2016.
On September 19, 2016 Raging Capital increased its ownership from 5.4% to 6.2%
Legal counsel to Raging Capital
Proxy Solicitor to DSP Group (2013)
Legal counsel to Starboard (2013)
% Outstanding 7.3%
Cost Basis 10.46
Company Info
Share Price 10.35
Revenue 138M
Market Cap 261M
Enterprise Value 224M
Net Cash 46M
EBITDA 6M
52 wk. range 8.20 – 13.15
EV/EBITDA 31.8
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 10 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Exar Corporation (EXAR)
Activist Investor: Simcoe Capital Management
Investor Info Catalyst Info
Shares 2,600,000 Catalyst: On February 9, 2017 EXAR entered into a settlement agreement with Simcoe to add one rep to the board
Comment: We initially covered EXAR on November 22, 2016 when Simcoe announced it has engaged with EXAR
regarding board representation
Legal counsel to Simcoe Capital
% Outstanding 5.2%
Cost Basis 8.70
Company Info
Share Price 10.92
Revenue 155M
Market Cap 548M
Enterprise Value 324M
Net Cash 226M
EBITDA 15M
52 wk. range 4.82 – 11.09
EV/EBITDA 22.3
Forest City Realty Trust, Inc. (FCE-A)
Activist Investor: Scopia Management
Investor Info Catalyst Info
Shares 23,726,734 Catalyst: On February 7 Scopia increased its Class A ownership to 9.8%
Comment: On June 6, 2016 Scopia Management disclosed a 7.4% "active" stake (Class A shares).
On December 7, 2016 Scopia entered into an agreement with Forest City to support the elimination of its dual
class stock and to support the board members up for election at the next shareholder meeting.
https://www.sec.gov/Archives/edgar/data/1647509/000119312516785766/d281689dex103.htm
% Outstanding 9.8%
Cost Basis 20.32
Company Info
Share Price 23.04
Revenue 970M
Market Cap 6.1B
Enterprise Value 9.4B
Net Cash -3.5B
EBITDA 415M
52 wk. range 16.43 – 24.22
EV/EBITDA 22.7
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 11 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Fiesta Restaurant Group (FRGI)
Activist Investor: JCP; Bandera; Radoff; Schechter (the “Investment Group”)
Investor Info Catalyst Info
Shares 1,909,237 Catalyst: On February 9, 2017 JCP issued a press release announcing that the former CEO of Carrols, which owned
Fiesta through 2012, has endorsed JCP's efforts to elect three new directors to the board
https://www.sec.gov/Archives/edgar/data/1461945/000092189517000253/dfan14a08569030_02092017.htm
Comment: We initially covered FRGI on September 16, 2016 when several investment funds formed a group with an
aggregate 6.2% ownership and disclosed their belief that significant operational and strategic opportunities
are available to enhance value.
On October 17, 2016 FRGI sent a response to the Investors' request to settle a potential proxy contest by
adding two new directors and the declassification of the board. In the letter, FRGI said that entering into any
settlement negotiations at this time is inappropriate.
https://www.sec.gov/Archives/edgar/data/1461945/000119380516004114/e615492_ex99-1.pdf
On January 30, 2017 JCP announced plans to nominate three directors to the board
https://www.sec.gov/Archives/edgar/data/1461945/000119380517000070/e615699_ex99-1.htm
Legal counsel to the Investment Group
% Outstanding 7.1%
Cost Basis Not Avail
Company Info
Share Price 28.70
Revenue 720M
Market Cap 767M
Enterprise Value 799M
Net Cash -65M
EBITDA 95M
52 wk. range 20.15 – 38.54
EV/EBITDA 8.4
Immersion Corporation (IMMR)
Activist Investor: VIEX Capital
Investor Info Catalyst Info
Shares 2,048,898 Catalyst: IMMR entered into a settlement with VIEX to appoint one new director to the board
https://www.sec.gov/Archives/edgar/data/1058811/000119380517000109/e615720_ex99-1.htm
Comment: We initially covered IMMR on June 29, 2016 when VIEX disclosed a 5.7% "active" stake
On August 22, 2016 VIEX announced it may seek board representation and/or advocate for the board to pursue
strategic alternatives if the stock price doesn't accurately reflect its intrinsic value
On December 27, 2016 VIEX nominated three candidates for election to the board along with a proposal to
declassify the board
Legal counsel to VIEX Capital
% Outstanding 7.1%
Cost Basis 6.79
Company Info
Share Price 10.50
Revenue 64M
Market Cap 303M
Enterprise Value 203M
Net Cash 95M
EBITDA -2M
52 wk. range 5.90 – 11.92
EV/EBITDA Negative
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 12 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Korea Equity Fund, Inc. (KEF)
Activist Investor: Bulldog Investors
Investor Info Catalyst Info
Shares 444,478 Catalyst: On February 6, 2017 Bulldog increased its ownership to 9.14%
Comment: We initially covered KEF on March 16, 2016 when City of London (COL) (42.3% at an average cost of
$8.80/share) submitted a shareholder proposal to terminate KEF's investment management and advisory
agreements with Nomura Asset Management.
On September 20, 2016 COL sent a letter to KEF's Chairman expressing its disappointment that the expected
merger with JPMorgan China Region Fund (COL owns 43% of JPMorgan China Region Fund) has reached an
impasse due to provisions of the Maryland Business Combination Act. COL says it will now submit a proposal
to terminate the investment management agreement at the earliest possible opportunity.
On December 20, 2016 COL sent a letter to the Chairman of KEF criticizing the board for adjourning the last
annual meeting "due to lack of sufficient votes to act upon the election of [the three Directors on the proxy
ballot]." COL contends there was sufficient votes and the board was simply unhappy with the results. COL is
demanding the board take steps to immediately liquidate.
https://www.sec.gov/Archives/edgar/data/912023/000107261316001010/korea13da_17993.htm
% Outstanding 9.14%
Cost Basis Not Avail
Company Info
Share Price 8.20
Revenue N/A
Market Cap 80M
Enterprise Value N/A
Net Cash N/A
EBITDA N/A
52 wk. range 6.39 – 8.54
EV/EBITDA N/A
Marchex, Inc. (MCHX)
Activist Investor: Edenbrook Capital
Investor Info Catalyst Info
Shares 2,670,444 Catalyst: On February 9, 2017 Edenbrook increased its ownership to 8.04% (Class B shares) and said that with the right
cost structure MCHX could earn 10% operating margins. Edenbrook also suggested the company use $20
million of cash to repurchase shares.
Comment: We initially covered MCHX on May 24, 2016 when Edenbrook Capital disclosed a 5.04% "active" stake.
On August 2, 2016 Edenbrook increased its ownership from 5.04% to 6.06%
On November 14, 2016 Edenbrook increased its ownership from 6.06% to 7.01%
% Outstanding 7.01%
Cost Basis 3.62
Company Info
Share Price 2.89
Revenue 136M
Market Cap 125M
Enterprise Value 2M
Net Cash 105M
EBITDA -11M
52 wk. range 2.46 – 4.68
EV/EBITDA Negative
Perrigo Company (PRGO)
Activist Investor: Starboard Value
Investor Info Catalyst Info
Shares 9,641,425 Catalyst: PRGO entered into a settlement with Starboard to accept the resignation of four directors and to appoint three
new directors
https://www.sec.gov/Archives/edgar/data/1517137/000092189517000215/ex991to13da106297198_020717.htm
Comment: We initially covered PRGO on September 9, 2016 when Starboard disclosed a 4.6% stake and sent a letter to
the CEO highlighting specific changes needed to improve performance and expressing concern about whether
the Company can generate more value for shareholders as a standalone business.
Legal counsel to Starboard Value
% Outstanding 6.7%
Cost Basis 88.58
Company Info
Share Price 79.96
Revenue 5.8B
Market Cap 13.2B
Enterprise Value 18.4B
Net Cash -5.7B
EBITDA 1.3B
52 wk. range 82.50 – 184.77
EV/EBITDA 13.8
Hedge Fund Solutions, LLC © 2003 – 2017 Page 13 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Quantum Corp. (QTM)
Activist Investor: VIEX Capital
Investor Info Catalyst Info
Shares 29,531,722 Catalyst: On February 6, 2017 VIEX nominated 5 to the board and issued a press release outlining the reasons for its
proxy contest.
https://www.sec.gov/Archives/edgar/data/709283/000101359417000103/quantumex99-020617.pdf
Comment: We initially covered QTM in our November 2, 2014 Catalyst Research Report, highlighting Starboard’s
15.90% (via stock and convertible debt) “active” stake and announced plans to engage with the Company
regarding board representation.
Starboard subsequently increased its “active” ownership stake in QTM from 15.9% to 16.4%
On May 15, 2013 QTM entered into a settlement agreement with Starboard in which it increased the size of the
board from 8 to 9 and added a Starboard rep. QTM also added 1 rep from Private Capital Management (an
8.25% shareholder)
On May 9, 2014 Starboard nominated 6 individuals for election to the QTM board
On July 29,2014 QTM entered into a settlement with Starboard agreeing to give them 4 of 9 board seats.
On May 6, 2015 Jeff Smith from Starboard resigned from the board. Starboard exercised its replacement
rights and appointed a new representative.
On December 28, 2015 VIEX Capital disclosed a 5.5% "active" stake in QTM
On January 21, 2016 VIEX increased its ownership to 7.8%; On February 2, 2016 VIEX increased its
ownership to 9.9%
On April 28, 2016 VIEX sent a letter to QTM announcing plans to nominate director candidates to the board.
On June 2, 2016 VIEX increased its ownership from 9.9% to 11.2%; On June 6, 2016 VIEX nominated five
candidates for election to QTM's board
http://www.sec.gov/Archives/edgar/data/709283/000101359416001085/quantumdfan14a-060616.htm
On September 27, 2016 QTM entered into a settlement with VIEX, granting board observer rights to two of
VIEX's nominees. https://www.sec.gov/Archives/edgar/data/709283/000120677416007244/quantum2935539-
ex101.htm
On December 6, 2016 QTM extended the board observation rights for VIEX's two representatives until
February 1, 2017
Proxy Solicitor to Quantum
Legal counsel to Starboard Value
% Outstanding 11.0%
Cost Basis 0.70
Company Info
Share Price 0.86
Revenue 499M
Market Cap 237M
Enterprise Value 336M
Net Cash -100M
EBITDA 22M
52 wk. range 0.35 – 0.97
EV/EBITDA 15.41
Continue to Next Page
Hedge Fund Solutions, LLC © 2003 – 2017 Page 14 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
RAIT Financial Trust (RAS)
Activist Investor: Highland Financial
Investor Info Catalyst Info
Shares 5,577,647 Catalyst: Highland sent a presentation to RAIT (through NexPoint Real Estate Advisors) titled, "Unlocking Value for
RAIT Shareholders"
https://www.sec.gov/Archives/edgar/data/1045425/000119312517034817/d300099dex991.htm
Comment: We initially covered RAS on December 6, 2016 when Highland Financial sent a letter to RAIT (through
NexPoint Real Estate Advisors) outlining several initiatives to improve value
https://www.sec.gov/Archives/edgar/data/1045425/000119312516784564/d226861dex991.htm
% Outstanding 6.1%
Cost Basis Not Avail
Company Info
Share Price 3.78
Revenue 215M
Market Cap 348M
Enterprise Value 2.3B
Net Cash -1.9B
EBITDA N/A
52 wk. range 2.04 – 3.83
EV/EBITDA N/A
Rentech, Inc. (RTK)
Activist Investor: Raging Capital
Investor Info Catalyst Info
Shares 3,686,727 Catalyst: On February 10, 2017 Raging Capital disclosed a 15.9% stake in RTK
Comment: We initially covered RTK on January 13, 2014 when Engaged/Lone Star sent a letter to RTK expressing
concern about the destruction of shareholder value and nominated four individuals to the Board.
On March 17, 2014 Engaged/Lone Star (Concerned Rentech Shareholders) issued a press release urging the
board to immediately halt capital raising plans and promptly hold its 2014 annual meeting.
On March 20, 2014 Engaged/Lone Star requested the Company hold a special meeting to allow shareholders to
vote on requiring the company to gain majority shareholder approval prior to an equity issuance of more than
4.9% of the outstanding shares.
On March 26, 2014 Engaged/Lone Star issued a presentation highlighting its plan for value creation at RTK.
http://www.sec.gov/Archives/edgar/data/868725/000141588914000962/ex1todfan14a09455004_032614.pdf
On March 27, 2014 RTK issued a press release stating that the board is focused on executing its strategy and
will review the presentation.
On April 10, 2014 RTK announced a $150M investment from Blackstone (which includes 2 Blackstone
appointed directors) and a settlement with Engaged/Lone Star to add 1 additional new director to its board.
http://finance.yahoo.com/news/rentech-announces-150-million-investment-131500662.html
Legal counsel to Raging Capital
Proxy Solicitor to Rentech (2014)
Legal counsel to Engaged/Lone Star (2014)
% Outstanding 15.9%
Cost Basis 2.08
Company Info
Share Price 2.63
Revenue 287M
Market Cap 61M
Enterprise Value 140M
Net Cash -86M
EBITDA -18M
52 wk. range 1.42 - 4.15
EV/EBITDA Negative
Hedge Fund Solutions, LLC © 2003 – 2017 Page 15 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
Stanley Furniture Co (STLY)
Activist Investor: Hale Capital
Investor Info Catalyst Info
Shares 1,504,255 Catalyst:
Comment: We initially covered STLY on December 22, 2014 when Hale/Talanta (5.4% as a group) sent a letter to the
Board, in which they nominated two candidates and provided a summary of the poor operating performance
and misguided strategic direction under current management, and they encouraged the Board to consider and
initiate a strategic sales process.
On February 13, 2015 STLY expanded the board and added one of Hale/Talanta's candidates to the board.
On September 23 Hale increased its ownership from 5.4% to 6.4% since joining the board in February
On December 4, 2015 Hale increased its ownership to 8.5%
STLY agreed to add one individual to the board and one additional director if the company fails to achieve 5%
net sales growth in 2016.
On February 16, 2016 Hale increased its ownership from 9% to 10.5% since adding one representative to the
board in January.
On March 1, 2016 Hale Partnership increased its ownership from 10.5% to 14.9%.
On March 2, 2016 Solas Capital disclosed a 16.4% "active" stake in STLY.
On November 18, 2016 Hale nominated director candidates to the board
% Outstanding 10.2%
Cost Basis 2.56
Company Info
Share Price 0.89
Revenue 49M
Market Cap 13M
Enterprise Value 7M
Net Cash 6M
EBITDA -3M
52 wk. range 0.86 – 3.65
EV/EBITDA Negative
Hedge Fund Solutions, LLC © 2003 – 2017 Page 16 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
CONTACT INFORMATION:
Hedge Fund Solutions, LLC
Damien J. Park
Tel. +1 215.325.0514
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or Email: [email protected]
The Catalyst Equity Research Report™ is a general circulation weekly. Hedge Fund Solutions and/or its
affiliates (the “Firm”) may have a consulting relationship with the companies featured in this report (the
“Companies”). The Firm may also actively trade in the securities of the Companies for its own account. At
any time, the Firm, funds it manages and/or its employees or their family members may have a long or short
position in registered or non-registered securities or in options on any such security of any company mentioned in this report.
The information contained in this report is not a complete analysis of every material fact with respect to the company, industry, or security and is not an offer or solicitation to buy or sell any security. Although
opinions and estimates expressed in this report reflect the current judgment of the Firm, the information
upon which such opinions and estimates are based is not necessarily updated on a regular basis. In addition, opinions are subject to change without notice. The Firm from time to time may perform consulting services
for companies mentioned in this report and may occasionally possess material, nonpublic information
regarding such companies. This information is not used in the preparation of this report. Facts and other information contained in this report have been obtained from the public sources considered reliable but are
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GUIDANCE FOR HIGH-STAKES CORPORATE SITUATIONS
Spotlight Advisors is focused on helping boards and investors with complex corporate situations. Our team of
seasoned professionals are from the most respected investment banks, law firms, investment advisory and strategic
communications practices in the country. We have experience with many varieties of corporate challenges,
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Hostile takeover defense and M&A activism offense and defense
Management buyouts, valuations, high profile litigation, succession planning, complex governance issues
Clients range from Fortune 100 to small-cap companies and from large institutional investor to family
offices
Contact:
Damien Park, Managing Director
Email: [email protected]
Tel: +1 215.325.0514
509 Madison Avenue, Suite 1608
New York, NY 10022
www.spotlightadvisors.com
Hedge Fund Solutions, LLC © 2003 – 2017 Page 17 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
PLATINUM SPONSORS – Legal Advisers
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Hedge Fund Solutions, LLC © 2003 – 2017 Page 18 of 18
HEDGE FUND SOLUTIONS CATALYST EQUITY RESEARCH REPORT ™
PLATINUM SPONSORS – Proxy Advisors
Innisfree M&A Incorporated is a full service proxy solicitation/investor relations firm providing clients with
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