Starboard Value Increases Its Stake In ACI Worldwide
Starboard Value has increased its stake in software company ACI Worldwide above the 13D reporting threshold for the first time, making it potentially the third company the activist has targeted this month, after CEO Jeff Smith took on Corteva and ON Semiconductor at a recent conference. Starboard had previously disclosed a 1.8% stake as part of its 13F quarterly portfolio disclosures but has spent the last two months adding to the position, according to Monday’s filing.
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Q3 2020 hedge fund letters, conferences and more
Starboard Targetting ACI Worldwide Due To An Undergoing A Leadership Transition
Starboard is known to target businesses undergoing a leadership transition and often calls for operational improvements or a sale. ACI Worldwide appointed former private equity executive Odilon Almeida as its CEO in February after Philip Heasley retired at the end of 2019 following 15 years at the helm.
David Einhorn’s Greenlight Capital funds returned 5.9% in the third quarter of 2020, compared to a gain of 8.9% for the S&P 500 in the same period. This year has been particularly challenging for value investors. Growth stocks have surged as value has struggled. For Greenlight, one of Wall Street’s most established value-focused investment funds, Read More
ACI Worldwide is categorized as highly vulnerable to activism by Activist Insight Vulnerability, with red flags against its gross profit margins, and dividend yield. Its shares were up more than 3% in after-hours trading Monday, after declining during normal trading hours.
What We’ll Be Watching For This Week
- What will happen at Mediobanca’s shareholder meeting tomorrow after Glass Lewis and Institutional Shareholder Services recommended investors vote in favor of a slate of directors proposed by the outgoing directors?
- After Institutional Shareholder Services recommended investors to vote for CF Energy’s director slate, will 11882716 Canada now fail to replace the entire board with its own five candidates at Thursday’s shareholder meeting?
- After failing to win the two-thirds shareholder support needed to complete the exchange of preferred shares for newly issued common stock, will Ashford Hospitality Trust succeed a second time around at its shareholder meeting on Friday?
Activist Shorts Update
Electric car and battery companies have been short targets for activists this year as the relevant industries continue to grow due to demand for cleaner energy sources. So far in 2020, both the auto manufacturing and business services industries have seen two companies targeted. Each industry has had three campaigns apiece, including two each against Nikola and Blink Charging.
In June, Edward Vranic issued a short report on Nikola, predicting that the impending free trading shares would cause an imminent crash in the stock to below $20. Then, in September, Hindenburg Research alleged Nikola was an intricate fraud built on dozens of lies throughout its founder and executive chairman Trevor Milton’s career.
In August, Blink Charging was the subject of a report by Mariner Research, arguing that its performance in the EV market had been tepid and was obscured by consistent promotion and retail mania over the EV space. Then, later that month, Culper Research contended that Blink had vastly exaggerated the size of its EV charging network in order to siphon money from investors to insiders.
Chart Of The Week
So far this year (as of October 23 2020), investors that disclose activism as part of their investment strategy have won seats at three of four board representation demands that went to vote at Europe-based companies. That is compared to three out of 10 in the same period last year.