Activist Fund Raging Capital Jettisons 2 Massive Positions, Plus Noteworthy Moves from 2 Other Hedge Funds

GoldenTree Asset Lends Capital to Eagle Bulk Shipping

According to a Schedule 13D filing, Steven A. Tananbaum’s GoldenTree Asset Management LP currently owns 71.18 million shares of Eagle Bulk Shipping Inc. (NASDAQ:EGLE), which make up 18.6% of the company’s outstanding shares. GoldenTree had a mere 5.90 million shares of the company in its equity portfolio at the end of December. The freshly-upped stake reflects the delivery of shares required to be issued under the Second Lien Loan agreement between GoldenTree, as well as other lenders, and Eagle Bulk Shipping. At the end of March, the company obtained a new second lien facility of $60 million from existing shareholders, including Mr. Tananbaum’s GoldenTree, and new capital providers. Under the terms of the freshly-inked Second Lien Loan agreement, Eagle Bulk Shipping Inc. (NASDAQ:EGLE) agreed to issue and offer to each lender additional shares of common stock without paying additional capital. Although the issuance of additional shares requires shareholder approval, most shareholders of Eagle Bulk Shipping, some of whom represent Second Lien lenders, already agreed on the issuance when signing the agreement. The loan under the aforementioned facility carries a rate of LIBOR plus 14% per annum or Base Rate, which is indicated in the agreement, plus 13% per annum. Eagle Bulk also reached an agreement with its First Lien lenders, which, together with the Second Lien Loan agreement, provided the company with roughly $105 million in additional liquidity. The aforementioned agreements significantly strengthened the company’s balance sheet, which will enable its management to pursue market opportunities.

Eagle Bulk Shipping transports a wide range of bulk cargoes, which includes coal, grain, ore, petcoke, cement, and fertilizer. The company owns and operates a fleet of 44 Supramax segment dry bulk vessels as of the end of 2015. The company’s net revenue for 2015 were $103.86 million, down by 33% year-over-year due to lower charter rates earned by the fleet in 2015. Shares of Eagle Bulk Shipping are down by an eye-popping 91% in the past 12 months. There were six hedge funds in our system with stakes in the company at the end of December, with them aggregately amassing nearly 65% of its outstanding shares. Howard Marks’ Oaktree Capital Management owned 15.71 million shares of Eagle Bulk Shipping Inc. (NASDAQ:EGLE) on December 31.

Raging Capital Discards Entire Outerwall Stake

As revealed by a freshly-amended 13G filing, William C. Martin’s Raging Capital Management LLC no longer owns any shares of Outerwall Inc. (NASDAQ:OUTR). The fund held a position of 1.18 million shares on December 31 according to its most recent 13F filing. The provider of automated retail solutions has seen its shares advance by 13% since the beginning of 2016, partially owing to pressure from activist shareholder Engaged Capital LLC, headed by Glenn W. Welling. Long story short, the company recently prevented a possible proxy fight with Mr. Welling’s firm by agreeing to add three directors to its Board as part of a settlement agreement.

Outerwall Inc. (NASDAQ:OUTR)’s main offerings in automated retail include the following business operations: the Redbox business, which allows consumers to rent and purchase movies and video games from self-service kiosks; the Coinstar business, which enables consumers to convert coins to cash, as well as convert coins and cash to stored value products at self-service kiosks; and the ecoATM business, which enables consumers to sell certain electronic devices for cash, as well as purchase and sell electronic devices through an online solution under the Gazelle brand.

The company’s revenue was $2.19 billion in 2015, down from $2.29 billion in 2014. The decrease was mainly driven by weakening performance of the Redbox segment due to a 5.8% decrease in same-store sales and the reduction of underperforming kiosks. Redbox’s same-store sales decline was mainly attributable to a decline in movie rentals, which continue to be impacted by the sustained secular decline in the physical movie rental market, and fewer box office movie titles released in 2015. The decline in video game rentals, which is also being driven by a transition to the digital space (though slower than that affecting movies), also impacted the performance of the Redbox segment. Outerwall’s shares are currently changing hands at around 9.8-times expected earnings, versus the forward P/E multiple of 17.4 for the S&P 500 Index. A total of 27 money managers tracked by Insider Monkey were invested in Outerwall on December 31 and had accumulated approximately 37% of the company’s outstanding shares. Fresh SEC filings show that Engaged Capital owns 2.43 million shares of Outerwall Inc. (NASDAQ:OUTR), which constitute 14.6% of its outstanding shares.