Tom Armistead

Adaptec: Value Plus a Possible Catalyst

This situation has deteriorated into a proxy battle between Steel Partners and Incumbent Management. I spent some time reading their various accusations and counter accusations, trying to come up with a nice follow up to this article.

What I finally came up with is neither side is telling the truth, the whole truth, and nothing but the truth. The promising beginnings of new growth are very likely to be trampled in the heat of battle. The stash of cash has become the bone of contention, it's a fight to the finish. Meanwhile if everybody had kept their peace and pulled together they could have salvaged some value.

Shares went down sharply in mid July, when Steel Parners distributed them to investors who requested redemption. Too many of them hit the market and the price plummeted. I bought some and soon after sold out all but 100 shares. It was a nice quick profit, 145% annualized.

But I will sell my last 100 shares tomorrow. It is rare for a small-time retail investor to profit from a hedge funds difficulties. I had that good fortune, why should I go back into these shares and watch in dismay as the two contestants trash the company they are fighting over?

Value Stock Screen: Potential Activist Targets

Interesting article, from the standpoint of a long-term investor the potential of activist involvement is a mixed blessing, sometmes all the likes of Carl Icahn or Bill Ackman are looking for is a special dividend, take on some debt, get a special dividend, and then management is hamstrung on acquisitions or capex.

I own ADPT, for the fact the company is cash rich, has legacy businesses that are more or less breaking even, and is looking to acquire tehnology in order to resume growth. If they succeed there is a good payday, otherwise there is little downside risk.

The stock was acting strange it was maybe two weeks ago it went down pretty fast on heavy volume, I didn't know what to make of it but I bought some more on the grounds it was well under net cash per share at the time, can't go wrong unless you think management is going to find a way to pee away the money.