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Tessera Technologies, Inc. (TSRA): Starboard Value Reduces Position and Reveals Top 3 New Picks

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Jeffrey Smith’s Starboard Value LP reduced its exposure to Tessera Technologies, Inc. (NASDAQ:TSRA) by 575,000 shares according to a filing revealed this week. According to the 13D Form filed with the U.S. Securities and Exchange Commission, the fund now owns 2.61 million common shares, representing 4.9% of the company’s outstanding stock. The investment firm also entered several new positions last quarter. According to its latest 13F filing, Starboard’s top 3 new picks were Staples, Inc. (NASDAQ:SPLS), Clean Harbors Inc (NYSE:CLH), and Alibaba Group Holding Ltd (NYSE:BABA).

Jeff Smith

Starboard Value is an activist hedge fund that was founded in 2002 by Jeffrey Smith. The firm employs a fundamental oriented approach and focuses primarily on undervalued companies whose management it then seeks to actively engage in discussions in order to identify opportunities to unlock further shareholder value. As of the end of the last quarter, Starboard Value had an equity portfolio valued at $4.41 billion, up from $2.88 billion disclosed at the end of the third quarter. The hedge fund’s top picks for the fourth quarter included MeadWestvaco Corp. (NYSE:MWV), Yahoo! Inc. (NASDAQ:YHOO), and Office Depot Inc (NASDAQ:ODP).

On Wednesday it was revealed that Starboard Value reduced its position in Tessera Technologies, Inc. (NASDAQ:TSRA) for the second time this quarter. Although it had already disclosed selling 1.0 million shares during the third quarter, and continues slashing its stake in the equity, the activist hedge fund still ranks as one of the company’s largest institutional investors. Furthermore, Starboard remains actively engaged in Tessera, with its representative Peter A. Feld serving on the Board of Directors.

After gaining 81% in 2014, Tessera Technologies, Inc. (NASDAQ:TSRA)’s shares have climbed by around 14% year-to-date. Starboard Value is not the only investment firm who benefited from this solid performance, as numerous other funds held a stake in the company. Steve Cohen’s Point72 Asset Management for example held a position of 1.20 million shares. Jim Simons’ Renaissance Technology was also betting on Tessera, increasing its holding by 39% last quarter, and disclosing ownership of around 1.07 million shares.

Starboard Value also revealed several new picks in its equity portfolio last quarter, including a position of 15.84 million shares in Staples, Inc. (NASDAQ:SPLS). The activist hedge fund seems to be particularly bullish regarding this stock, since it increased its exposure even further this quarter, and currently owns 31.46 million shares. Starboard recently commended the company’s Board of Directors for negotiating and announcing the acquisition of Office Depot Inc (NASDAQ:ODP). Furthermore, the activist hedge fund stated that management’s estimate of post-merger synergies is too conservative. According to Starboard, the acquisition of Office Depot could result in synergies of more than $2 billion. In addition, the hedge fund claims shares of Staples, Inc. (NASDAQ:SPLS) could gain another 100% once the merger is completed.

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