Becker Drapkin Management, led by Matthew Drapkin and Steven R. Becker, has revealed in a 13D filing with the SEC that it entered into a “Standstill Agreement” with Comverse Inc (NASDAQ:CNSI) that will result in Mr. Drapkin becoming an independent member of the board of directors of the company, effective as of March 12, 2014. Moreover, under the terms of the agreement, the size of the board will also increase to a total of еight directors.
Becker Drapkin management holds 1.35 million shares of Comverse, which are worth $52.4 million and which represent 27.38% (the highest proportion) of Becker Drapkin Management’s equity portfolio.
Comverse Inc (NASDAQ:CNSI) is a provider of software and systems enabling services for converged billing and active customer management, mobile Internet, and value-added services. In the past four years, the company has generated losses, which shrank from $221.97 million from 2010 to $20.29 million in 2013, and in 2014 is expected to generate profits of around $36 million with respective earnings per share of $1.60. The company’s price is up 20% year-to-date, currently trading around $34 a share, 55 times the estimated earnings for 2014. Analysts recommend that investors hold the stock.
Other funds that hold significant positions in Comverse Inc (NASDAQ:CNSI) include Steven Cohen‘s Sac Capital Advisors, which owns around 589,000 shares worth $22.8 million and Michael Doheny‘s Freshford Capital Management, which holds 1.18 million shares worth $45.8 million.
Matthew Drapkin also serves as a board director at Glu Mobile Inc. (NASDAQ:GLUU) and Alloy Inc (NASDAQ:ALOY), two companies operating in the Services Sector. More than 30% of Becker Drapkin Management’s equity portfolio consists of Services stocks. Investments of $26.3 million in Tuesday Morning Corporation (NASDAQ:TUES) and of $24.9 million in Pacer International, Inc. (NASDAQ:PACR) aggregately represent 26.79% of Becker Drapkin’s 13F portfolio.