Adam Wolfberg and Steven Landry‘s Eastbay Asset Management has filed a Form 13D on Shutterfly, Inc. (NASDAQ:SFLY), the fund’s top stock pick at the end of 2015. The filing shows that Eastbay has added about 360,000 shares to its Shutterfly position in 2016, lifting it to 5.4% of the company’s shares. Wolfberg and Landry’s fund also sent a letter to the company’s Board of Directors on February 26 stating that it was concerned by the dismissiveness which Shutterfly is showing towards a potential acquisition offer made by a private equity firm, as relayed in the company’s most recent Form 8-K, filed on February 23. Shutterfly stated that it is not engaged in merger discussions and that it is more interested in its financial results and in finding a new CEO. The full content of the filing can be found below.
You can access the original SEC filing by clicking here.
Ownership Summary Table
Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
---|---|---|---|---|---|---|
EastBay Asset Management | 0 | 1,896,071 | 0 | 1,896,071 | 1,896,071 | 5.4% |
Adam Wolfberg | 0 | 1,896,071 | 0 | 1,896,071 | 1,896,071 | 5.4% |
Steven Landry | 0 | 1,896,071 | 0 | 1,896,071 | 5.4% |
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Page 1 of 15 SEC Filing
Shutterfly, Inc. |
(Name of Issuer) |
Common stock, $0.0001 par value per share |
(Title of Class of Securities) |
82568P304 |
(CUSIP Number) |
Adam Wolfberg c/o EastBay Asset Management, LLC 1345 Avenue of the Americas, 3rd Floor New York, New York 10105 (212) 702-7148 |
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) |
February 26, 2016 |
(Date of Event Which Requires Filing of this Statement) |
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.240.13d-1(e), 240.13d‑1(f) or 240.13d-1(g), check the following box [ ]. | |
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent. | |
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). |
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Page 2 of 15 SEC Filing
CUSIP No. | 82568P304 |
1. | NAME OF REPORTING PERSONS | |
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) | ||
EastBay Asset Management, LLC |
2. | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | ||
(a) | [_] | ||
(b) | [_] |
3. | SEC USE ONLY | |
4. | SOURCE OF FUNDS | |
WC |
5. | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) | [_] | |
6. | CITIZENSHIP OR PLACE OF ORGANIZATION | |
Delaware |
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | ||
7. | SOLE VOTING POWER | |
0 |
8. | SHARED VOTING POWER | |
1,896,071 |
9. | SOLE DISPOSITIVE POWER | |
0 |
10. | SHARES DISPOSITIVE POWER | [_] | |
1,896,071 |
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Page 3 of 15 SEC Filing
11. | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING | |
PERSON | ||
1,896,071 |
12. | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES | |
CERTAIN SHARES* | ||
13. | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |
5.4% |
14. | TYPE OF REPORTING PERSON | |
IA, OO | ||
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Page 4 of 15 SEC Filing
CUSIP No. | 82568P304 |
1. | NAME OF REPORTING PERSONS | |
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) | ||
Adam Wolfberg |
2. | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | ||
(a) | [_] | ||
(b) | [- ] |
3. | SEC USE ONLY | |
4. | SOURCE OF FUNDS | |
WC |
5. | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) | [_] | |
6. | CITIZENSHIP OR PLACE OF ORGANIZATION | |
United States |
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | ||
7. | SOLE VOTING POWER | |
0 |
8. | SHARED VOTING POWER | |
1,896,071 |
9. | SOLE DISPOSITIVE POWER | |
0 |
10. | SHARED DISPOSITIVE POWER | [_] | |
1,896,071 |
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Page 5 of 15 SEC Filing
11. | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING | |
PERSON | ||
1,896,071 |
12. | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES | |
CERTAIN SHARES* | ||
13. | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |
5.4% |
14. | TYPE OF REPORTING PERSON | |
IN, HC | ||
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Page 6 of 15 SEC Filing
CUSIP No. | 82568P304 |
1. | NAME OF REPORTING PERSONS | |
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) | ||
Steven Landry |
2. | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | ||
(a) | [_] | ||
(b) | [- ] |
3. | SEC USE ONLY | |
4. | SOURCE OF FUNDS | |
WC |
5. | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) | [_] | |
6. | CITIZENSHIP OR PLACE OF ORGANIZATION | |
United States |
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | ||
7. | SOLE VOTING POWER | |
0 |
8. | SHARED VOTING POWER | |
1,896,071 |
9. | SOLE DISPOSITIVE POWER | |
0 |
10. | SHARED DISPOSITIVE POWER | [_] | |
1,896,071 |
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Page 7 of 15 SEC Filing
11. | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING | |
PERSON | ||
1,896,071 |
12. | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES | |
CERTAIN SHARES* | ||
13. | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |
5.4% |
14. | TYPE OF REPORTING PERSON | |
IN, HC | ||
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Page 8 of 15 SEC Filing
CUSIP No. | 82568P304 | ||
Item 1. | Security and Issuer. |
This statement on Schedule 13D (the “Schedule 13D”) relates to the common stock, $0.0001 par value per share (the “Common Stock”), of Shutterfly, Inc. (the “Issuer”). The address of the principal executive offices of the Issuer is 2800 Bridge Parkway, Redwood City, California 94065. | ||
Item 2. | Identity and Background. |
(a)-(c) | This Schedule 13D is being filed jointly by (i) EastBay Asset Management, LLC (“EastBay”), a Delaware limited liability company, as the investment manager to certain private investment funds and separately managed accounts, with respect to Common Stock owned by such private investment funds and separately managed accounts, (ii) Adam Wolfberg (“Mr. Wolfberg”), a United States citizen and a principal of EastBay with respect to the Common Stock owned by such private investment funds and separately managed accounts, and (iii) Steven Landry (“Mr. Landry”), a United States citizen and a principal of EastBay with respect to the Common Stock owned by such private investment funds and separately managed accounts (collectively, the “Reporting Persons”). Each of Mr. Wolfberg’s and Mr. Landry’s present principal occupation or employment is acting as a private investor. The principal business address of the Reporting Persons is 1345 Avenue of the Americas, 3rd Floor, New York, New York 10105. Each of Mr. Wolfberg and Mr. Landry is a managing member of EastBay and, as such, is in the position to determine the investment and voting decisions made by EastBay on behalf of its clients. |
(d) | None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). | |||
(e) | None of the Reporting Persons has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws. |
Item 3. | Source and Amount of Funds or Other Consideration. |
The net investment costs (including commissions, if any) of the Common Stock directly owned by the private investment funds and separately managed accounts advised by EastBay is approximately $79,962,641. The Common Stock was purchased with the investment capital of the private investment funds and separately managed accounts advised by EastBay. |
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Page 9 of 15 SEC Filing
Item 4. | Purpose of Transaction. |
The Common Stock held by the Reporting Persons was acquired for, and is being held for, investment purposes by the Reporting Persons. The acquisitions of the Common Stock were made in the ordinary course of the investment activities of the Reporting Persons. The Reporting Persons may acquire additional Common Stock, dispose of all or some of these Common Stock from time to time, in each case in open market or private transactions, block sales or purchases or otherwise, or may continue to hold the Common Stock, depending on business and market conditions, its continuing evaluation of the business and prospects of the Issuer and other factors. On February 26, 2016, the Reporting Persons sent a letter to the Issuer’s board of directors (i) to express discontent with the handling of an unsolicited bid to acquire the Issuer received by the Issuer from a private equity firm and (ii) to urge the Issuer to conduct a formal review of all prospective financial and strategic buyers. A copy of the letter is attached hereto as Exhibit C and is incorporated herein by reference. Except as set forth above, the Reporting Persons do not have any plans or intentions to engage in other communications with one or more shareholders, officers or directors of the Issuer, including discussions regarding the members of the Issuer’s board of directors as well as the Issuer’s operations and strategic direction that, if effected, could result in, among other things: (1) the acquisition of additional Common Stock of the Issuer, or the disposition of Common Stock of the Issuer; (2) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer; (3) a sale or transfer of a material amount of assets of the Issuer; (4) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board of directors; (5) any material change in the present capitalization or dividend policy of the Issuer; (6) any other material change in the Issuer’s business or corporate structure; (7) changes in the Issuer’s charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (8) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted on an inter-dealer quotation system of a registered national securities association; (9) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; and/or (10) any action similar to those enumerated above. Each of the Reporting Persons reserves the right, based on all relevant factors and subject to applicable law, at any time and from time to time, to review or reconsider its position, change its purpose, take other actions (including actions that could involve one or more of the types of transactions or have one or more of the results described in paragraphs (a) through (j) of Item 4 of Schedule 13D) or formulate and implement plans or proposal with respect to any of the foregoing. Any future decision of the Reporting Persons to take any such actions with respect to the Issuer or its securities will take into account various factors, including the prospects of the Issuer, general market and economic conditions and other factors deemed relevant. |
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Page 10 of 15 SEC Filing
Item 5. | Interest in Securities of the Issuer. | |||
(a)-(c) | As of the date hereof, (i) each of the Reporting Persons may be deemed to be the beneficial owner of 1,896,071 shares of Common Stock, constituting 5.4% of the Common Stock, based upon 34,855,162 shares of Common Stock outstanding as of February 11, 2016, as set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed by the Issuer on February 16, 2016. EastBay has the sole power to vote or direct the vote of 0 shares of Common Stock; has the shared power to vote or direct the vote of 1,896,071 shares of Common Stock; has the sole power to dispose or direct the disposition of 0 shares of Common Stock; and has the shared power to dispose or direct the disposition of 1,896,071 shares of Common Stock. Mr. Wolfberg has the sole power to vote or direct the vote of 0 shares of Common Stock; has the shared power to vote or direct the vote of 1,896,071 shares of Common Stock; has the sole power to dispose or direct the disposition of 0 shares of Common Stock; and has the shared power to dispose or direct the disposition of 1,896,071 shares of Common Stock. Mr. Landry has the sole power to vote or direct the vote of 0 shares of Common Stock; has the shared power to vote or direct the vote of 1,896,071 shares of Common Stock; has the sole power to dispose or direct the disposition of 0 shares of Common Stock; and has the shared power to dispose or direct the disposition of 1,896,071 shares of Common Stock. The transactions by the Reporting Persons in the securities of the Issuer during the past sixty days are set forth in Exhibit B. All such transactions were carried out in open market transactions. The Reporting Persons specifically disclaim beneficial ownership in the shares of Common Stock reported herein except to the extent of their pecuniary interest therein. |
Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect | |
to Securities of the Issuer. | ||
The Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to the Common Stock. |
Item 7. | Material to be Filed as Exhibits. |
Exhibit A: Joint Filing Agreement Exhibit B: Schedule of Transactions in Common Stock of the Issuer Exhibit C: Letter to the Issuer’s Board of Directors dated February 26, 2016 | ||
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Page 11 of 15 SEC Filing
Dated: February 26, 2016 | EastBay Asset Management, LLC | |
By: /s/ Adam Wolfberg | ||
Name: Adam Wolfberg | ||
Title: Managing Member |
/s/ Adam Wolfberg | ||
Adam Wolfberg |
/s/ Steven Landry | ||
Steven Landry |
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Page 12 of 15 SEC Filing
Dated: February 26, 2016 | EastBay Asset Management, LLC | |
By: /s/ Adam Wolfberg | ||
Name: Adam Wolfberg | ||
Title: Managing Member |
/s/ Adam Wolfberg | ||
Adam Wolfberg |
/s/ Steven Landry | ||
Steven Landry |
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Page 13 of 15 SEC Filing
Date of Transaction | Title of Class | Number of Shares Purchased | Number of Shares Sold | Price Per Share |
12/28/2015 | Common stock, $0.0001 par value per share | 20,000 | $44.58 | |
12/29/2015 | Common stock, $0.0001 par value per share | 28,055 | $45.02 | |
12/30/2015 | Common stock, $0.0001 par value per share | 11,000 | $44.99 | |
12/31/2015 | Common stock, $0.0001 par value per share | 61,018 | $44.87 | |
1/4/2016 | Common stock, $0.0001 par value per share | 5,797 | $43.36 | |
1/5/2016 | Common stock, $0.0001 par value per share | 3,683 | $42.65 | |
1/6/2016 | Common stock, $0.0001 par value per share | 20,000 | $42.55 | |
1/7/2016 | Common stock, $0.0001 par value per share | 25,000 | $41.39 | |
1/8/2016 | Common stock, $0.0001 par value per share | 7,875 | $40.67 | |
1/11/2016 | Common stock, $0.0001 par value per share | 18,783 | $40.42 | |
1/12/2016 | Common stock, $0.0001 par value per share | 25,000 | $40.19 | |
1/14/2016 | Common stock, $0.0001 par value per share | 25,000 | $40.85 | |
1/15/2016 | Common stock, $0.0001 par value per share | 25,000 | $40.09 | |
1/19/2016 | Common stock, $0.0001 par value per share | 10,000 | $39.96 | |
1/20/2016 | Common stock, $0.0001 par value per share | 20,000 | $39.64 | |
1/26/2016 | Common stock, $0.0001 par value per share | 15,000 | $40.95 | |
1/27/2016 | Common stock, $0.0001 par value per share | 10,000 | $40.65 | |
1/28/2016 | Common stock, $0.0001 par value per share | 30,000 | $40.25 | |
1/29/2016 | Common stock, $0.0001 par value per share | 31,449 | $41.34 | |
2/2/2016 | Common stock, $0.0001 par value per share | 25,000 | $41.65 | |
2/4/2016 | Common stock, $0.0001 par value per share | 42,400 | $37.20 | |
2/8/2016 | Common stock, $0.0001 par value per share | 3,000 | $36.86 | |
2/10/2016 | Common stock, $0.0001 par value per share | 15,000 | $38.56 | |
2/17/2016 | Common stock, $0.0001 par value per share | 20,000 | $39.35 |
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Page 14 of 15 SEC Filing
1) | To mention that “The Board exercises its fiduciary duties” yet is “not engaged in negotiations regarding the sale of the Company” is lip service and a contradictory statement. Especially when it is our understanding that the offer is from a highly respected private equity firm with the initial bid materially above the current stock price. Furthermore, the Board should also realize that this is just a “starting offer” that would likely be increased if an NDA is signed and a sale process is commenced. Claiming that “delivering its 2016 results and hiring a new CEO” are higher priorities than exploring a very credible takeover offer is hard to fathom. |
2) | We strongly encourage the Board to fully investigate and identify the source of the leak. We have our own suspicions given the unusual nature of the leak (electronically sent to multiple sell-side analysts!?!) that suggests someone new to this game with a motivation to sabotage the process. Disseminating material insider information is a serious criminal offense. |
3) | We were surprised that the Company chose to disclose news of acquisition interest at the end of the filing under “Other Events”- behind items that were “old news” and previously disclosed by the Company. The placement buried at the end of the 8K on top of the dismissive language suggests that this highly credible takeover approach is being viewed by the Board as an afterthought. |