Financial media loves to publish stories about hedge funds’ failures. We are sick and tired of reading about Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and activist Bill Ackman’s painful losses. We don’t think the financial media pays enough attention to hedge funds’ success stories. At the beginning of September, activist hedge fund Alden Global bought 9.5% of Pier 1 Imports Inc (NYSE:PIR) after the shares dipped. We discussed the stock 2 months ago in an article. Here is how Randall Smith described the investment:
“On September 7, 2016, the Issuer announced that President and CEO Alex W. Smith will step down as President, CEO and a member of the Issuer’s Board of Directors (the “Board”), effective December 31, 2016, and that the Issuer is conducting a search for a new CEO. Also on September 7, 2016, the Issuer announced disappointing preliminary second quarter financial results. Following these developments, the Reporting Persons engaged, and intend to continue to engage, in communications with management and the Board regarding certain matters, including the Issuer’s recent operational performance, shareholder representation on the Board and the CEO search process. The Reporting Persons believe that the Issuer is at a critical juncture and look forward to a constructive dialogue with management and the Board and are hopeful that the Board will voluntarily take appropriate action to address the concerns raised by the Reporting Persons.”
Alden Global bought 6.25 million shares on September 8th at around $4.10 and increased its position to 7.9 million shares by the end of September. Pier 1 Imports Inc (NYSE:PIR) shares trade at $9.49 today. That’s a return of more than 130%. We just wanted to point this out because nobody else will. We suggest you start tracking the moves of Alden Global and pay more attention if it backs up the truck and loads up.
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Today Randall Smith filed an amendment to his original 13D filing. The details can be seen below.
Ownership Summary Table
Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
---|---|---|---|---|---|---|
Alden Global Opportunities Master Fund | 7,632,034 | 7,632,034 | 7,632,034 | 9.2% | ||
Alden Global Capital | 7,632,034 | 7,632,034 | 7,632,034 | 9.2% | ||
Heath Freeman | 7,632,034 | 7,632,034 | 7,632,034 | 9.2% |
Page 1 of 8 – SEC Filing
(Name, Address and Telephone Number of Person
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Page 2 of 8 – SEC Filing
1 | NAME OF REPORTING PERSON Alden Global Opportunities Master Fund, LP | ||
2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
3 | SEC USE ONLY | ||
4 | SOURCE OF FUNDS WC | ||
5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
6 | CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands | ||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER – 0 – | |
8 | SHARED VOTING POWER 7,632,034 | ||
9 | SOLE DISPOSITIVE POWER – 0 – | ||
10 | SHARED DISPOSITIVE POWER 7,632,034 | ||
11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,632,034 | ||
12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.2% | ||
14 | TYPE OF REPORTING PERSON PN |
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Page 3 of 8 – SEC Filing
1 | NAME OF REPORTING PERSON Alden Global Capital LLC | ||
2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
3 | SEC USE ONLY | ||
4 | SOURCE OF FUNDS AF | ||
5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 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 7,632,034 | ||
9 | SOLE DISPOSITIVE POWER – 0 – | ||
10 | SHARED DISPOSITIVE POWER 7,632,034 | ||
11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,632,034 | ||
12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.2% | ||
14 | TYPE OF REPORTING PERSON IA, OO |
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Page 4 of 8 – SEC Filing
1 | NAME OF REPORTING PERSON Heath Freeman | ||
2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) o (b) o | |
3 | SEC USE ONLY | ||
4 | SOURCE OF FUNDS AF | ||
5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) | ¨ | |
6 | CITIZENSHIP OR PLACE OF ORGANIZATION USA | ||
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7 | SOLE VOTING POWER – 0 – | |
8 | SHARED VOTING POWER 7,632,034 | ||
9 | SOLE DISPOSITIVE POWER – 0 – | ||
10 | SHARED DISPOSITIVE POWER 7,632,034 | ||
11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,632,034 | ||
12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | o | |
13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.2% | ||
14 | TYPE OF REPORTING PERSON IN |
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Page 5 of 8 – SEC Filing
Item 3. | Source and Amount of Funds or Other Consideration. |
Item 4. | Purpose of Transaction. |
Item 5. | Interest in Securities of the Issuer. |
A. | Alden Master Fund |
| (a) | As of the close of business on December 19, 2016, Alden Master Fund beneficially owned 7,632,034 Shares. |
| (b) | 1. Sole power to vote or direct vote: 0 |
| 2. Shared power to vote or direct vote: 7,632,034 |
| 3. Sole power to dispose or direct the disposition: 0 |
| 4. Shared power to dispose or direct the disposition: 7,632,034 |
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Page 6 of 8 – SEC Filing
| (c) | The transaction in the Shares by Alden Master Fund since the filing of Amendment No. 3 to the Schedule 13D is set forth in Schedule A and is incorporated herein by reference. |
B. | Alden |
| (a) | Alden, as the investment manager of Alden Master Fund, may be deemed the beneficial owner of the 7,632,034 Shares owned by Alden Master Fund. |
| (b) | 1. Sole power to vote or direct vote: 0 |
| 2. Shared power to vote or direct vote: 7,632,034 |
| 3. Sole power to dispose or direct the disposition: 0 |
| 4. Shared power to dispose or direct the disposition: 7,632,034 |
| (c) | Alden has not entered into any transactions in the Shares since the filing of Amendment No. 3 to the Schedule 13D. The transaction in the Shares on behalf of Alden Master Fund since the filing of Amendment No. 3 to the Schedule 13D is set forth in Schedule A and is incorporated herein by reference. |
C. | Mr. Freeman |
| (a) | Mr. Freeman, as the President of Alden, may be deemed the beneficial owner of 7,632,034 Shares owned by Alden Master Fund. |
| (b) | 1. Sole power to vote or direct vote: 0 |
| 2. Shared power to vote or direct vote: 7,632,034 |
| 3. Sole power to dispose or direct the disposition: 0 |
| 4. Shared power to dispose or direct the disposition: 7,632,034 |
| (c) | Mr. Freeman has not entered into any transactions in the Shares since the filing of Amendment No. 3 to the Schedule 13D. The transaction in the Shares on behalf of Alden Master Fund since the filing of Amendment No. 3 to the Schedule 13D is set forth in Schedule A and is incorporated herein by reference. |
Item 7. | Material to be Filed as Exhibits. |
| 99.1 | Letter to the Board of Directors, dated December 20, 2016. |
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Page 7 of 8 – SEC Filing
Alden Global Opportunities Master Fund, LP | |||
By: | Alden Global Capital LLC Investment Manager | ||
By: | /s/ Heath Freeman | ||
Name: | Heath Freeman | ||
Title: | President |
Alden Global Capital LLC | |||
By: | /s/ Heath Freeman | ||
Name: | Heath Freeman | ||
Title: | President |
/s/ Heath Freeman | |
Heath Freeman |
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Page 8 of 8 – SEC Filing
Shares of Common Stock Sold | Price Per Share($) | Date of Sale |
281,466 | 6.1800 | 11/22/2016 |