Robert L. Chapman, Jr.’s 13D poison pen letters are welcome relief in the generally flat, arid landscape of SEC filings, and so it’s no small disappointment to us that he has been quiet of late. When we started Greenbackd, we imagined that we’d be covering his missives on a regular basis. Unfortunately, aside from his appointment in January as Chief Executive Officer of EDCI Holdings Inc (NASDAQ:EDCI), Chapman hasn’t troubled the SEC filing clerk at 5670 Wilshire Boulevard with so much as a Form 13F this year and hasn’t filed a 13D since August last year. We think it’s a shame, and so we ask, “Where in the world is Chapman Capital?”
Chapman is widely regarded as the progenitor of the 13D poison pen letter. He’s also one of the more literate shareholder activists prepared to share his letters with the world at large. Said The New Yorker, in an August 7, 2006 article, 13D:
Bob writes letters - publicly filed with the Securities and Exchange Commission - that no recreational user of, say, the Microsoft Word thesaurus could dare parse, let alone compose. A sampling of Chapman’s correspondence from the past two months reveals the following usages: “pretermit,” “fustigation,” “macerate,” “ablated,” “accretive,” “remora,” “phlebotomizing,” “gasconade.” Only occasionally does he bother to define his terms for the benefit of the less literate. (” ‘Remora’: any of several marine fishes of the family Echeneidae, having on the head a sucking disk with which they attach themselves to sharks; see volatility injected into other activist portfolios due to the remora’s often swashbuckling behavior.”)
As with all genres, the 13D attack letter has its tropes: macho swagger about work ethic, war metaphors, regional stereotyping. Chapman’s contributions stand out, however, with a baroque style that is reminiscent of David Foster Wallace: heavy on footnotes (there are fourteen in one paragraph of a recent filing) and on wordplay (no alliteration is too much: “expeditious exercise,” “tutelary tactics,” “insidious ink”). In early June, Chapman fired off a letter (”Dear Denny”) to the C.E.O. of the Dallas-based software company Carreker, whom he called “Long Winder of the Year.” “I have nightmares involving my choking down gourmet tuna sandwiches and uninformed, ‘long-term’ business judgments, both being served in abundant quantity by you and your Texas ‘pardners,’ ” he wrote. (At one point, he referred to the C.E.O.’s brother “Jimbo,” whose “bloodline,” in a recent press release, had evidently “pressed the surface like a varicose vein.”)
Chapman’s oeuvre is “asset-rich companies with battered stock prices” (WSJ.com subscription required) and he often operates in the universe of stocks trading below liquidation value. With more stocks fitting his criteria available now than at any time in recent history, we figure that Chapman Capital should be quite, er, active. Unfortunately, that doesn’t seem to be the case, and the 13D genre is the poorer for it.
Come back, Bob, and bring your poison pen.