In a freshly-filed 13D with the SEC, Mark Rachesky’s MHR Fund Management revealed that the Board of Directors of Key Energy Services Inc. (NYSE:KEG) elected Mark Rosenberg, who acts as principal of Fund Management, to serve as the non-executive Chairman of the company’s Board. The public filing also indicates that MHR Fund Management held its position in Key Energy unchanged at 17.48 million shares, which represent 11.1% of the company’s outstanding common stock. At the same time, Eric Semler’s TCS Capital Management disclosed a 5.28 million share-stake in Angie’s List Inc. (NASDAQ:ANGI) through a separate 13D filing, with the position accounting for 9.0% of the company’s common stock. This marks a gain of 1.47 million shares from the fund’s previous position in the company disclosed in a 13D form filed on July 29, 2015.
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MHR Fund Management is a value-oriented, value-driven hedge fund founded by Mark Rachesky in 1996. The New York-based investment firm employs a highly differentiated, control-focused, private equity investing approach and primarily invests in distressed and undervalued middle-market companies. MHR Fund Management oversees over $5 billion in assets under management, while its public equity portfolio has a market value of $2.47 billion as of June 30.
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Key Energy Services Inc. (NYSE:KEG) offers its clients a wide range of onshore energy production services and solutions. Specifically, the company provides a complete range of well intervention services in all major oil and gas producing regions of the United States, Mexico, Colombia, Ecuador, the Middle East, and Russia. The shares of Key Energy have been free-falling since the beginning of May, and have now lost 67% year-to-date. Indeed, the free-fall is a response to the recent weakness in oil prices; there is a lot of uncertainty around future commodity prices, so energy companies tend to spend less on production maintenance, which is what Key Energy does. Earlier this week, the company issued a press release announcing that Robert Drummond, the President and Chief Operating Officer of Key Energy, will assume the role of Chief Executive Officer no later than December 31, 2016, after Richard J. Alario announced his plans to retire next year. Recently, the company also announced its second quarter financial results, posting consolidated revenues of $197.5 million, compared to $350.6 million a year ago. The company’s net loss came to $65.38 million for the quarter, compared to $52.20 million reported last year. In the meantime, Ken Griffin’s Citadel Investment Group, the second-largest equity holder of Key Energy within our database, significantly upped its stake during the second quarter, amassing a 12.89 million-share stake.
TCS Capital Management, the other hedge fund discussed in this article, was established by Eric Semler in 2001. The firm aims to invest in value stocks by employing a long/short strategy accompanied by a bottom-up stock picking approach. TCS Capital mainly invests in the media and telecom sectors. As stated by the fund’s 13F filing for the June quarter, Eric Semler’s firm manages a public equity portfolio worth $197.2 million at the end of June.
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Angie’s List Inc. (NASDAQ:ANGI) operates a local services marketplace and consumer review site in the United States. The company offers a marketplace to research and purchase local services for home, health, and automotive service needs. The company’s stock has dropped by slightly more than 24% since the beginning of the year, and MHR Fund Management expressed its belief that the shares of Angie’s List are trading at an attractive level. Additionally, Eric Semler and his team believe that Angie’s List might have several options to increase its market value, so they intend to discuss its operations and strategic direction with the company’s officers and members of the Board. Among the potential topics of discussion are a potential sale, strategic business partnerships and combinations, and the pending selection of its next Chief Executive Officer. Some analysts believe that Angie’s List has a great brand name and has a good base of subscribers, but the company lacks technology and its marketing strategy is not quite appropriate. One of the main challenges the company faces at the moment is its leadership, as the firm’s co-founder and CEO, William Oesterle, stepped down earlier this year. In addition to that, some analysts familiar with the matter believe that Angie’s List might actually be very eager to sell itself if the company is made an attractive offer. Andrew Redleaf’s Whitebox Advisors is among the largest shareholders of Angie’s List Inc. (NASDAQ:ANGI) within our database, holding 1.04 million shares.
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