News & Press
Activist trading during the pandemic will lead to big shakeups in the year ahead for consumer, health and financial stocks, according to a special situations research firm.
“Moving forward, we believe these are the sectors where activists are going to be involved in, pushing for spinoffs, M&A activity and management overhauls as the market’s recovery continues,” The Edge deals analyst Alex Korda said in a phone interview.
Barry Diller of IAC is set to reap great rewards from his 15-year tech seed-and-harvest strategy of taking Vimeo public by June 2021. Back in 2004, omnipotent visionary Diller, 78, knew he was on to a good thing when he made inroads with Rochester Institute of Technology students Jake Lodwick, now 39, from Baltimore, and 38 year-old Zach Klein from Rochester, NY.
Back then, Vimeo was a side project for the small team at Connected Ventures, who were focused on sharing site CollegeHumor.com. Four years on from Millennium Bug Y2K losses, investors were also counting the cost of the dot.com crash and many didn’t have the stomach for new tech – never mind mobile video. IAC purchased a majority stake in Connected Ventures for over $20 million in 2006 and eventually the founders stepped back.
Now in 2020, Vimeo has a $2.75 billion valuation and IAC has had ten successful spins under its belt, and The Edge believes Vimeo with its 41% growth in revenue from 2019 is set for a stellar 2021.
Sportico – By Brendan Coffey, Dec 18, 2020
When Nassef Sawiris disclosed last week that he is the largest individual shareholder not named Dolan to own a part of the New York Knicks and Rangers, it raised a curious question: Why is an activist investor and Egyptian fertilizer billionaire taking equity in a company tightly controlled by Long Island’s Dolan family?
Sawiris disclosed in a mandatory regulatory filing that he owns 6.3 percent of MSG Sports, the holding company of the NBA and NHL franchises that trades under the MSGS ticker. His investment office, NNS Holdings, controls 982,098 shares today and will get another 247,386 in March through an agreement with an undisclosed counterparty, according to the filing.
The transaction is unusual because on the rare occasions Sawiris takes large positions in publicly traded companies, he’s agitating for change. It’s been five years since Sawiris had a stake in a U.S. company, according to Securities and Exchange Commission records. At that time, he got one investment, Martin Marietta Materials, to buy his other, Texas Instruments—a company he long called for to be sold. The transaction probably doubled his money. In 2015, he partnered with an activist fund to buy up shares in Germany’s Adidas, getting him in the door to address its board in fluent German and advocate for improvements. Shares have quintupled since. An Irish brewer, a Swiss cement maker and a Spanish engineering firm are other companies in which he’s taken activist stakes in recent years.
“In MSGS, he won’t be able to do that,” Jim Osman, founder and CEO of consulting group The Edge, a securities research firm specializing in special situation stocks, said in a phone interview. “Why? Because the dominant voting position of the Dolans is around 70%. The Dolans don’t really get pushed around.”
One notable group is missing from the list of buyers amid the stock market’s relentless advance: corporate executives.
Earlier this year they timed the March market trough, scooping up shares of their own companies at the fastest pace since 2009. Come December however, with institutional and retail traders pumping record cash into exchange traded funds that track equities, insiders are still selling shares and in levels that have preceded prior market corrections.
Visionary CEO Keith E. Wandell should go down in history as the man who introduced the electric motorcycle to the US market and possibly the first CEO to bring it to the world. It was in 2011 that Mr. Wandell first showcased his unbranded team-made creation to a keen San Francisco motor bike enthusiast crowd. He might be the most notorious CEO that the iconic US bike manufacturer Harley-Davidson has had (founded 117 years ago in Milwaukee, Wisconsin).
However, The Edge believes new CEO Jochen Zeitz is the best thing to happen to the company since Mr. Wandell left and successor Matthew S. Levatich was fired suddenly thanks to Impala Asset Management, the $2.4 billion activist hedge fund led by Bob Bishop.
Playboy Enterprises may well end up being king of these three SPACs due to its vintage brand value and other offerings like gaming. And with its new motto “Pleasure for All,” it is by far the best known example of so-called “‘blank check” companies. Since SPACs (or special purpose acquisition companies) are all the rage, The Edge believes Draftkings, Inc. and Chargepoint, Inc. are good bets alongside Playboy amidst a backdrop of brands leading the way for the future US economy.
John Coleman, portfolio manager at New York’s Alpine Global Management, has been studying the SPAC market since its inception. He talked to The Edge about the strategy he uses, saying: “In regards to SPACs, I employ a much different strategy than most other investors. I can tell you that I look closely at the technical setups of each SPAC, juxtaposed against the fundamentals of the announced business combination and the valuation you’re paying for it. It’s also important to have a feel for the overall market atmosphere when performing this process.” There’s more tips from John later in the article.
“Growth is the new value investing.” That’s what Jim Osman, the founder of The Edge Group, said when asked about how he was dissecting today’s prevailing market landscape.
“I’m a value investor at heart, but it just is dead,” he said. “And it just hasn’t worked for years.” He added: “Any savvy investor is not going to sing the same narrative.”
When the market tides shift, so does Osman. That’s why he’s focusing on companies that are focusing on what counts: technology and change.
Osman says astute investors have been rewarded for putting technology and special situations at the forefront of their methodology this year. And he expects that trend to continue.
Traders looking for the next winning IPO should seek carve-outs that make a clean break from their parent companies, according to a new study.
IPOs from carved-out businesses outperform when their parent company fully exits an ownership stake, compared to those in which parents keep a position after the listing. That’s according to a new study presented on Tuesday by accounting firm KPMG AG and The Edge Consulting Group — a research firm that focuses on spinoffs — to a group of fund managers.
Wall Street deal maker Ronald E. Blaylock has just made his first investment in Pfizer stock three years after he joined the board — signalling there is about to be an upward move in the company’s fortunes.
The Corporate Governance insider, who sits on the Audit Committee, snapped up $500k shares just three weeks ago ahead of the hotly anticipated Q4 $195bn Mylan and Upjohn mega-merger-Spinoff called Viatris — as well as the Cerevel Therapeutics Nasdaq IPO.
Every investor wants a sustainable edge—a system that produces strong returns and is repeatable. Some investors look for the cheapest stocks. Others look for growth. Still others focus on exploiting trading arbitrage. There are many ways to try to earn a return.
London native Jim Osman has his own, unconventional way to invest. A Wall Street veteran who spent almost a decade at Société Générale, he wasn’t happy pitching typical analyst research to institutional brokerage clients. Instead, he was drawn to special situations—underfollowed companies, unique circumstances, or difficult-to-understand investments. In a Q&A with Al Root of Barron’s, Jim describes his thinking behind Special Situations as compelling investments and several of his current ideas.
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