Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

GSI Technology, Inc. (GSIT) Shares Spiking Amid Renewed Acquisition Offer, Activist Pressure

Page 1 of 2

One spike just wasn’t enough. Shares of GSI Technology, Inc. (NASDAQ:GSIT) spiked early yesterday morning following the news that GigOptix Inc (NYSEMKT:GIG) had renewed its pursuit of the company, offering to purchase it for $6.50 per share. This morning those shares have performed an encore, spiking again following a 13D filing by Eric Singer’s activist fund Vertex Capital Advisors, which puts pressure on GSI Technology to accept what the fund believes to be an attractive offer considering GSI’s lengthy history of underperformance and undesirable market position. Vertex Capital Advisors owns 2.35 million shares of GSI Technology, a 9.9% stake in the company, with the fund invested at a cost basis of about $5 per share.

GSI Technology (GSIT)

Following the moves of activist funds like Vertex Capital Advisors is important because it is a very specific and focused strategy in which the investor doesn’t have to wait for catalysts to realize gains in the holding. An activist fund like Vertex can simply create its own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activists’ hedge funds has been much higher than the returns of an average hedge fund. Soon, we’ll be releasing a new quarterly newsletter written by former activist hedge fund analyst Michael Bland that tracks ten or so activist campaigns at any given time. We have found through extensive research that the top small-cap picks of hedge funds are also capable of generating high returns and built a system around these findings. In the 33 months since our Insider Monkey small-cap strategy was launched it has returned over 144% and beaten the S&P 500 ETF (SPY) by more than 84 percentage points (read more details).

New York-based activist hedge fund Vertex Capital Advisors was founded by portfolio manager Eric Singer in 2014. Singer previously managed activist campaigns while with Potomac Capital Management, with a focus on hardware-based technology companies. His successes include winning a board seat at PLX Technology, Inc. (NASDAQ:PLXT) in December 2013 and facilitating a sale of that company, in which Potomac was the largest shareholder, to Avago Technologies Ltd (NASDAQ:AVGO) for $309 million in 2014. Unsurprisingly, he has shown activist interest in companies in which Potomac is still invested as well, including Axcelis Technologies Inc (NASDAQ:ACLS), with whom Singer reached an agreement in March to have two independent directors added to that company’s board.

Singer’s involvement with GSI Technology, Inc. (NASDAQ:GSIT) began in January when he first disclosed the 9.9% position that he holds today. In the middle of March he nominated four directors, including himself, for the company’s board following GSI adding two new directors to increase its board composition to seven members. Those additions were seen as a way for the entrenched board to further insulate its position against Singer’s activist involvement.

GigOptix Inc (NYSEMKT:GIG)’s own involvement stretches back to August 18 of last year when it made an identical $6.50 per share offer to purchase all of the outstanding common shares of GSI Technology, Inc. (NASDAQ:GSIT).  Rather than engage with GigOptix on any level, GSI refused the offer, which was eventually withdrawn in November. Not only that, GSI’s board then proceeded to structure a more than $2 million management compensation plan for the company’s executives in the event it was acquired and they lost their jobs.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!