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HC2 Holdings Inc (HCHC), PharmAthene Inc. (PIP): Two Micro-Caps That Institutional Investors Like

HC2 Holdings Inc (OTCMKTS:HCHC) and PharmAthene, Inc. (NYSEMKT:PIP) have been feeling hedge funds’ bullishness lately. On Monday, Phil Frohlich’s Prescott Group Capital Management acquired 15,00 shares of PharmAthene, Inc. (NYSEMKT:PIP), while Sander Gerber’s Hudson Bay Capital Management disclosed an increase in its exposure to HC2 Holdings Inc (OTCMKTS:HCHC).

PharmAthene, Inc. (NYSEMKT:PIP) is a $101.1 million market cap biodefense company engaged in the development and commercialization of medical countermeasures against biological and chemical weapons in the United States. The company saw Phil Frohlich’s Prescott Group Capital Management acquire 15,00 shares of Common Stock last Monday. The fund paid $1.54 per share for 6,500 of them, and $1.55 per share, for the remaining 8,500 shares. Following these transactions, Prescott Group owns 7.98 million shares of Common Stock, up from the 7.96 million disclosed in mid-August, and from the 5.24 million declared by the end of the second quarter of 2014.


This position makes of Prescott Group the largest institutional shareholder (amongst those we keep track of) at PharmAthene, Inc. (NYSEMKT:PIP), trailed by Matthew Mark’s Jet Capital Investors, which owns 1.43 million shares of the company, worth more than $2 million by the end of the second quarter.

HC2 Holdings Inc (OTCMKTS:HCHC) is a $102.3 million market cap integrated facilities-based provider of premium voice communication services for national telecom operators and mobile operators, among others. Also last Monday, Sander Gerber’s Hudson Bay Capital Management disclosed a change in its stake in the company. The transactions reported “relate to an amendment to the terms of the outstanding shares of Series A Convertible Participating Preferred Stock to, among other things, reduce the initial conversion price from $4.25 per share to $4.00 per share, in each case subject to adjustment in accordance with the terms of the Series A Convertible Participating Preferred Stock” (SEC).

The fund disclosed ownership of the same amount of Series A Convertible Participating Preferred Stock*: 12,500 shares. However, according to the new conversion rate, this position equates to 3.13 million shares of Common Stock.

Another institutional investor that seems quite bullish about HC2 Holdings Inc (OTCMKTS:HCHC) is Mario Gabelli’s GAMCO Investors, which started a stake in the company over the third quarter of the year, and raised its bet in mid-August, to 1.1 million shares.

* “The Series A Convertible Participating Preferred Stock is convertible at the option of the holder of the security and will be convertible at the option of the Company, beginning on the third anniversary of the date of issuance, in each case at the then applicable conversion rate. The conversion rate is generally determined by dividing the then applicable accrued value of a share of Series A Convertible Participating Preferred Stock by the then applicable conversion price” (SEC)

Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned

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