bebe stores, inc. (NASDAQ:BEBE) is the subject of a new 13D filing issued by Michael Zimmerman‘s Prentice Capital Management, which shows that the hedge fund has upped its stake in the company by about 130,000 shares since a 13G filing issued on February 24. However, Prentice Capital is otherwise steaming hot concerning its investment, changing its stance to activist and sending a letter to the company’s Board of Directors on March 4 in which it expressed its frustration with the company’s performance and the lack of contact received from the company since the investment firm sent it a letter on December 8.
The following excerpt is taken from the March 4 letter, which can be read in its entirety from the below link to the original filing, where it can be found under ‘Exhibit 2’:
“We are writing to express our extreme dissatisfaction with the Board’s continuing and blatant disregard for the interests of BEBE shareholders – other than those of the controlling shareholder, Mr. Mashouf – while its stock has cratered 87% over the past year. During this time, we have made numerous attempts to contact both the Board (including a letter sent on December 8th, 2015) as well as Mr. Mashouf, but we have yet to receive a response of any kind.
BEBE’s stock price performance over the past 1, 3 and 5 year periods has been truly abysmal. Nonetheless, the Company still possesses an asset-rich balance sheet relative to its existing stock price. Specifically, as of the March 2nd close, BEBE traded at $0.47 per share with a market capitalization of $37 million, no debt, and $53 million of cash and securities; additionally, the Company’s balance sheet includes an estimated $30 million of real estate value. All told, the Company’s total assets stand at approximately $83 million, or $1.05 per share – a 123% premium to its current stock price! As many of you are aware, companies usually trade at a (significant) premium to their underlying net assets; unfortunately, as we sit here today, the market is ascribing a significantly negative value to BEBE’s business and management team (something which rarely happens).”
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|
|Prentice Capital Management||0||4,377,081||0||4,377,081||4,377,081||5.55%|
|Prentice Capital Long Short Equity Fund||0||4,377,081||0||4,377,081||4,377,081||5.55%|
Page 1 of 8 SEC Filing
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Under the Securities Exchange Act of
(Name of Issuer)
(Title of Class of Securities)
|Michael Zimmerman||Mathew B. Hoffman, Esq.|
|Prentice Capital Management, LP||Greenberg Traurig, P.A.|
|100 West Putnam Avenue-Slagle House||401 E. Las Olas Blvd., Suite 2000|
|Greenwich, CT 06830||Fort Lauderdale, FL 33301|
|(212) 756-8040||(954) 768-8203|
Authorized to Receive Notices and Communications)
(Date of Event which Requires Filing of
If the filing person has previously filed
a statement on Schedule l3G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because
of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. o
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).