Some say knowledge is power, but we like to think of it as the secret sauce to successful investing, decisions, or analysis. With "DEF14 Knowledge+," our rebranded monthly blog series (yes, we decided to rename DEF14 Digest to DEF14 knowledge+), you'll be armed with the juicy tidbits of information about the corporate landscape. Just like its predecessor, this series is dedicated to providing you with enlightening and informative content! So, buckle up and get ready to feast on a delectable spread of shareholder activism news and trends. Bon appétit!
Despite the quietness of July, the month saw over 30 active campaigns in full swing
As the proxy season comes to a close in June, July has been relatively quiet in terms of major events. However, during this seemingly calm period, we've been diligently keeping track of more than 150 active and prestigious activist funds and groups.
Despite the surface calm, the world of shareholder activism is constantly bustling with activity behind the scenes. In July, our Activist Alpha® platform recorded activity in a total of 36 campaigns. The majority of these campaigns displayed positive performance, yet there were instances where investors, such as Engaged Capital LLC vs. BRC inc., experienced a significant drop.
▲ DEF14's Activist Alpha® provides real-time updates on the performance and positions of active campaigns filed by renowned activist groups.
A Closer Look at the Newly Launched Campaigns
With so much happening, we want to direct our attention exclusively to the recently unveiled 13D filings in July. These filings shed light on the intentions and objectives of activist investors, giving us valuable insights into their strategies and goals. In particular, there were three new 13D campaigns, and we will examine each of them in more detail one by one.
â–² In July, there were 3 new 13D campaigns.
July 17th: Bulldog v. MFS High Yield Municipal Trust (CMU)
Before we explore the campaigns, let's introduce the activist investor and the target company. Bulldog, the activist investor, is a prominent and influential activist investment firm renowned for its aggressive and tenacious approach to shareholder activism. Known for taking on underperforming or mismanaged companies, Bulldog serves as a driving force in advocating for corporate changes and maximizing shareholder value. Their expertise and strategies have established them as a formidable player in the world of activist investing, drawing attention and scrutiny from companies and investors across various industries.
The target company in this case is MFS High Yield Municipal Trust (CMU). As a notable player in the high yield municipal bond market, CMU offers attractive investment opportunities to shareholders seeking substantial yields from municipal bonds. Given its significance in the financial landscape, CMU's performance and market position are of considerable interest to activist investors and financial analysts alike.
Campaign details:
â–· Key Players: The Schedule 13D filing is submitted by Bulldog Investors, LLP, a registered investment adviser, on behalf of Phillip Goldstein and Andrew Dakos, who are partners of the firm.
â–· Investment Philosophy: The filing indicates that Bulldog Investors, LLP, and its partners aim to enhance shareholder value in their investments. They closely monitor market conditions and client objectives to guide their actions, but their intention is to avoid direct control or management of the Issuer, MFS High Yield Municipal Trust (CMU).
â–· Purpose of Transaction: The Schedule 13D filing discloses that shares of CMU have been accumulated on behalf of Bulldog Investors, LLP's clients and a registered closed-end investment company for which Mr. Goldstein and Mr. Dakos have investment and voting authority. The filing also reveals that an affiliate of the reporting parties intends to nominate certain individuals as Trustees and present a non-binding proposal to CMU's shareholders at the Annual Meeting.
â–· Voting Policy: The Schedule 13D filing reveals that Bulldog Investors, LLP, and its partners have shared power to dispose of and vote shares of CMU. As of the filing date, Bulldog Investors, LLP has sole power to dispose of and vote 0 shares, while having shared power to dispose of and vote 1,318,969 shares. Additionally, Mr. Goldstein and Mr. Dakos individually have shared power to dispose of and vote an additional 759,991 shares. This voting policy indicates that Bulldog Investors, LLP and its partners have significant voting influence over a substantial number of CMU shares, which aligns with their investment philosophy of enhancing shareholder value. The shared power to vote suggests a collaborative approach to decision-making within the investment firm, reinforcing their active participation in CMU's affairs.
â–· Future Actions: While the filing does not explicitly outline future plans, it suggests that the reporting parties may continue to actively participate in CMU's governance. Their investment philosophy, focused on enhancing shareholder value, hints at potential future actions aimed at positively impacting the company's performance and value.
▷ DEF14’s comment about the campaign: The Schedule 13D filing provides a glimpse into Bulldog Investors, LLP's approach to investing and their involvement in CMU. By nominating individuals for Trusteeship and presenting a proposal to shareholders, the reporting parties show their commitment to influencing the company's direction. Their focus on shareholder value adds an interesting dimension to the filing and highlights their proactive stance in shareholder activism.
July 23rd: Gamco vs. Atlanta Braves
The activist investor, Gamco Investors, Inc. (GAMCO), is a distinguished investment management firm with a strong history. Founded in 1977 by Mario Gabelli, GAMCO offers value-oriented strategies for both individual and institutional investors. Renowned for their successful track record and personalized service, GAMCO continues to attract investors seeking reliable financial solutions.
As for the target company, the Atlanta Braves are an iconic MLB team based in Atlanta, Georgia. Boasting a rich history and three World Series championships, the Braves' passionate fan base plays a significant role in driving Major League Baseball's success. Investors are drawn to the Braves' strong brand recognition, diverse revenue streams, and potential for growth in this renowned sports franchise, making them an appealing long-term opportunity.
Campaign details:
â–· Key Players: This Schedule 13D is filed by entities engaging in different aspects of the securities business, including investment advising, private investment partnerships, broker-dealing, and more. Mario J. Gabelli, the key figure, controls these entities through his ownership interest.
â–· Investment Philosophy: The Reporting Persons acquired the Series A Common Stock for investment purposes, managing shared, sole, or both investment and voting power for various accounts. Their analytical activities involve assessing companies, including the Issuer, and issuing analyst reports, suggesting potential changes to enhance shareholder value.
â–· Purpose of Transaction: The decision to file on Schedule 13D instead of the short-form Schedule 13G is to provide more expansive disclosure and ensure proper reporting of beneficial ownership.
â–· Voting Policies: The Reporting Persons have adopted general voting policies relating to specified issues affecting corporate governance and shareholder values. They generally vote in favor of cumulative voting, reasonable golden parachutes, one share one vote, and more.
â–· Future Actions: While adhering to their investment philosophy, the Reporting Persons do not seek control of the Issuer or participate in its management. They continuously assess market conditions and investment opportunities, and individual clients' objectives may lead to diverse actions among the Reporting Persons.
â–· Potential Transfers of Voting Power: In case the aggregate voting position exceeds 25% of the Issuer's total voting position, one or more of the Reporting Persons may transfer voting power to independent committees of directors or owners.
â–· Covered Persons: Individual Covered Persons, who are not Reporting Persons, acquired the Securities for investment purposes for their accounts or their immediate family members' accounts.
â–· No Present Plans or Proposals: Other than the investment philosophy mentioned earlier, none of the Reporting Persons or Covered Persons have present plans or proposals related to significant transactions or changes in the Issuer.
â–· Stock performance of Atlanta Braves: The average one-year price target for Atlanta Braves Holdings Inc. (NASDAQ: BATRA) has been revised to $54.74 per share, indicating a 31.62% increase from the previous estimate of $41.59 as of June 1, 2023. Gamco Investors, Inc. Et Al holds 2,527K shares of BATRA. This reflects an increase of 1.29% compared to its previous filing, with the firm raising its portfolio allocation in BATRA by 7.27% over the last quarter.
â–· Other information: In May 2023, Mario Gabelli, urged fellow baseball fans to look beyond team loyalties and consider the Atlanta Braves as an investment opportunity. His clients owned a significant portion of the team's voting stock, with about 62 million shares of publicly traded stocks (BATRA and BATRK tickers). Gabelli playfully encouraged even rival team fans like the New York Mets to consider the Braves' investment potential and jokingly suggested gifting 100 shares for Mother's Day.
▷ DEF14’s comment about the campaign:The investment philosophy of the firm is a driving force behind their actions, always seeking to enhance shareholder value in their investments. This commitment to value creation remains consistent, even as they adapt their strategies based on market conditions and client objectives. Their intention to avoid direct control or management of the Issuer shows their focus on being active investors without seeking operational control.
Gabelli's perspective not only highlights the investment potential of the Braves, encouraging investors to look beyond team rivalries, but also adds an intriguing dimension to the Schedule 13D filing. This insight underscores the importance of staying informed about the ongoing battles shaping the corporate landscape, as it may present unique opportunities for investors.
July 25th: Gamco v. Absolute Software Corporation
As previously mentioned, there's no need to reiterate the introduction of Gamco. Let's now turn our attention to the target company: Absolute Software Corporation! Founded in 1993, this leading cybersecurity and endpoint management solutions provider offers innovative and comprehensive software to protect devices, data, and applications. Trusted by organizations worldwide, Absolute Software delivers real-time insights, robust endpoint security, and ensures regulatory compliance across various industries. These exceptional qualities make Absolute Software an enticing opportunity for investors seeking growth in the cybersecurity sector.
Campaign details:
â–· Key Players: This Schedule 13D filing involves multiple entities, including GGCP, GGCP Holdings, GAMCO Investors, and others, all associated with renowned investor Mario J. Gabelli. Together, they own more than 5% of Absolute Software's common shares.
â–· Investment Philosophy: These entities are primarily engaged in the securities business, acting as investment advisers for various clients, including institutions and individuals. Their investment philosophy revolves around analyzing companies they invest in and actively engaging with management to enhance shareholder value. However, they don't aim to take control of the company or interfere with its management.
â–· Source of Funds: The group used approximately $34 million to acquire the reported securities. Some funds came from their investment advisory clients, while others were used from their own accounts.
â–· Purpose of Transaction: The Reporting Persons bought Absolute Software's shares for investment purposes. They continuously evaluate the company's performance, capital structure, and market conditions. If needed, they may suggest changes in operations or capital structure to boost shareholder value. But, they do not intend to actively manage the company.
â–· Voting Policies: The Reporting Persons have specific voting policies aimed at promoting good corporate governance and shareholder interests. They generally vote in favor of policies such as cumulative voting and reasonable golden parachutes but are against measures like greenmail and poison pills.
â–· Future Actions: Depending on their assessments, the Reporting Persons might increase their holdings or decide to sell some of the securities in the future. Each entity's investment objectives and requirements may differ, leading to varying decisions.
â–· No Specific Plans: Apart from their general investment philosophy and voting policies, the entities involved don't have any immediate plans or proposals that would lead to significant changes in the company.
▷ DEF14’s comment about the campaign: As of the current situation, Mario J. Gabelli and the entities associated with him are primarily oriented towards long-term investment strategies and actively engaging in constructive discussions with the company's management team. Given their substantial ownership stake, their decisions and actions have the potential to significantly influence the direction and overall value of the company in the future, directly impacting other shareholders as well. Their commitment to long-term investment and open communication with management positions them as influential stakeholders in shaping the company's future growth and performance.
July's Schedule 13D Filings Illuminate Key Players' Strategies and Future Actions
In conclusion, the Schedule 13D filings in July have shed light on the active involvement of prominent investors and investment firms in shaping the corporate landscape.
Bulldog Investors, LLP, and its partners emphasize their commitment to enhancing shareholder value in their investments, while Mario J. Gabelli's entities demonstrate a proactive approach to analyzing companies and advocating for positive changes.
These filings provide valuable insights into the investment philosophies and future actions of these key players, hinting at potential developments in the companies they are invested in.
Unveiling the Latest 13D Campaigns and Market Impact with DEF 14’s Activist Alpha ®
As we come to the end of this blog post, we hope you've gained valuable insights into the latest 13D campaigns launched in July by prominent activist investors. With DEF14's Activist Alpha ®, we continue to closely monitor over 150 activist funds and investors, providing you with timely updates on their actions and their impact on the market.
If you want to stay ahead of the game and receive real-time information, consider subscribing to Activist Alpha© for direct access to our comprehensive data and analysis. For more information about our products and how they can support your specific needs, feel free to reach out to us.
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