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Verso - Please Save Us From All The Money!

Apr. 09, 2018 1:23 PM ETBillerud AB (publ) (BLRDY)6 Comments
Bryan Shealy profile picture
Bryan Shealy


  • Large Verso investor sells off all of their stock.
  • Verso forms strategic alternatives committee.
  • Q4 produced massive earnings growth.
  • Rapid price movements remain a key risk in global competition.

Previously, I wrote about Verso (VRS) in the article titled "Verso Corporation: Value/Growth Opportunity At A Great Price!" Since then, there have been a few interesting developments that continue to make this a great opportunity.

My thesis on Verso suggested it was undervalued according to book value. This thesis has not changed and, in fact, has gotten stronger from the previous two quarters of profitability. Since that time the book value increased to $21.65, a 24% discount from its current price of $16.35. Why then has the stock been flat over the previous months? Macroeconomic trends and current market volatility offer only a partial explanation; there is also another reason.

Verso Investor Sells Large Chunk of Holdings

Since the beginning of January 2018, Mudrick Capital Management has sold over 1.8 million shares of Verso at a valuation of over $30 million. This investor previously owned more than 10% of Verso and has been aggressively reducing their position size.

What is the reason behind the sales of these shares? Mudrick stated in their SEC filing that they were frustrated with the rate of returns that Verso was producing. Verso previously sold a hydroelectric power plant in the area and Mudrick has been pushing for the sale of the Androscoggin Mill as well. Their belief is that the sale of the mill will push the company even further into profitability. However, Verso wants to keep the mill and increase its production capacity to keep up with increasing demand.

The sale of shares from Mudrick has kept Verso from pushing into the $20 range. In fact, since it went under 10% ownership of Verso it is not required to submit SEC Form 4. It is still unloading shares even into April 2018. It currently owns close to 1% of Verso and should

This article was written by

Bryan Shealy profile picture
Visit Exploitinvesting.com and read analysis on small cap Japanese Stocks. I'm a Millennial Investor, efficiency fanatic, inventory specialist, environmental capitalist, and Benjamin Graham follower. Previously a freelance writer for broken leg investing. I enjoy writing articles about deeply undervalued companies. I focus on micro cap and small cap companies since they offer the most potential. Currently I run two portfolios, one with my in depth researched American stocks below book value and the other a quant portfolio focusing on international net nets.

Analyst’s Disclosure: I am/we are long VRS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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