Activists Icahn and Ubben Take Profits Off the Table from Successful Campaigns, Plus 2 Other Activist Moves

According to a Form 4 filing, Jeffrey Ubben’s ValueAct Capital has sold 1.31 million shares of Motorola Solutions Inc. (NYSE:MSI) since Thursday at a weighted average price of $71.17, trimming its overall holding in the company to 9.65 million shares. The popular hedge fund vehicle has been gradually cutting its stake in Motorola Solutions lately, after reporting ownership of 17.59 million shares of Motorola through the latest round of 13F filings. Friendly activist investor Jeffrey Ubben amassed a 10% stake in the Chicago-based telecommunications giant between 2011 and 2012, soon after technology company Motorola split into two separate companies. Mr. Ubben’s approach to shareholder activism has paid off handsomely, considering that the shares of Motorola Solutions Inc. (NYSE:MSI) have advanced by 63% over the past five years.

The provider of mission-critical communication infrastructure, devices, accessories, software, and services generated net sales of $5.70 billion in 2015, down from $5.88 billion in 2014. The decrease was mainly attributable to lower net sales in Europe and Africa, and Latin America, which were impacted by challenging macroeconomic conditions in Latin America and Eastern Europe, as well as by foreign exchange headwinds. Shares of Motorola Solutions are currently trading at 14.7-times expected earnings, somewhat above the forward P/E ratio of 11.8 for the Communications Equipment industry. There were 22 hedge funds in our database with stakes in Motorola at the end of the December quarter, compared to 27 registered at the end of the third quarter. William B. Gray’s Orbis Investment Management trimmed its position in Motorola Solutions Inc. (NYSE:MSI) by 12% during the fourth quarter to 13.05 million shares.

A recent 13D filing shows that Canyon Capital Advisors LLC, co-founded by Joshua Friedman and Mitchell Julis, has nominated three independent candidates for election to Ambac Financial Group Inc. (NASDAQ:AMBC)’s Board of Directors. Canyon Capital owns 2.01 million shares of Ambac as of December 31, as disclosed in the fund’s 13F for the December quarter. The public filing reveals Canyon’s discontent with the company’s “underperformance and lack of strategic direction under existing management”, thus urging for leadership changes at the financial services company. It should be noted that Canyon Capital represents an Ambac policyholder that has exposure to $376 million of the company’s bonds, and has been trying to force or persuade the bond insurer to accelerate the settlement of several billion dollars of policy claims.

Ambac Financial Group Inc. (NASDAQ:AMBC)’s management believes that “Canyon has a fundamental conflict of interest – its economic interests are aligned with certain creditors, not with shareholders.” Ambac further stated in the press release that: “We think Canyon’s campaign to place a hand-picked candidates on the Ambac Board is a thinly veiled maneuver designed to accelerate payments on its own creditor position, regardless of the consequences for the company, other creditors and shareholders.”

Shares of Ambac have declined by 37% over the past 52 weeks despite having gained 11% since the beginning of 2016. The number of hedge funds in our system with long positions in the bond insurer declined to 16 from 27 during the December quarter. William C. Martin’s Raging Capital Management increased its position in Ambac Financial Group Inc. (NASDAQ:AMBC) by 33% during the fourth quarter, ending the year with 1.59 million shares.