Soros Fund Management has disclosed in a recent regulatory filing with the Security and Exchange Commission that it has decreased its stake in Penn Virginia Corporation (NYSE:PVA) to 8.40% from as much as 9.53%, or from 6.25 million shares to 6 million shares. The “economic exposure” to the stock, however, has decreased by less – in terms of percentage of Penn Virginia Corporation (NYSE:PVA) total outstanding shares – to 9.38%. Furthermore, in absolute terms, George Soros’ exposure to the oil and gas company increased to 6.7 million shares, with around 700,000 shares being in the form of cash-settled total return swap contracts. Because Penn Virginia Corporation (NYSE:PVA) has increased the number of total shares in circulation following a private placement, Soros’ stake has shrunk, in spite of stepping up its position.
Additionally, Soros has reported that on July, 1 it sold call options on some 250,000 shares with an expiration date of July, 19 and a strike price of $17.
In a rare move that hardly describes Soros’ investing philosphy, the legendary investor engaged in activism with the company one month ago, sending a letter to the board of directors of Penn Virginia Corporation (NYSE:PVA) where it has raised concerns about the company’s recent missteps. Particularly, the investor has made reference to some underwhelming presentations at several conferences and issuance of preferred stock at a “significant discount”, following which the stock tumbled given the dilution. Indeed, in the last three months Penn Virginia Corporation (NYSE:PVA)’s stock fell close to 30%, erasing half of year-to-date gains. Soros has reached its verdict, saying the company should be “promptly” sold, as there are “numerous” potential buyers ready to pay a handsome premium over the last trading price.
As the stock continues to head down and with Soros, which is the largest shareholder, pressing for a sale, Penn Virginia Corporation (NYSE:PVA) may become an attractive takeover target.