Billionaire Dan Loeb, one of the most scrutinized hedge fund managers and founder of Third Point LLC, believes that the hedge fund industry is in the “first innings of a washout in hedge funds and certain strategies”, as “most investors have been caught offsides at some or multiple points over the past eight months”. In a freshly-revealed letter to investors, Third Point said that the first quarter was “one of the most catastrophic periods of hedge fund performance that we can remember since the inception of this fund” in 1996. However, “volatility is bringing excellent opportunities” according to the New York-based hedge fund, so it does make sense to monitor hedge fund moves at this point in time. For that reason, the following article will discuss three SEC filings recently submitted by several widely-known investment firms such as Starboard Value LP.
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Activist Hedge Fund Starboard Reaches Settlement Agreement with Marvell Technology
According to a freshly-amended 13D filing, Jeffrey Smith’s Starboard Value LP currently owns 33.72 million shares of Marvell Technology Group Ltd. (NASDAQ:MRVL), which account for 6.5% of the company’s outstanding common stock. This stake includes 13.32 shares underlying call options. As revealed in Starboard’s initial 13D filing on the company, submitted with the SEC in early February, the activist hedge fund previously owned 34.74 million shares of Marvell Technology. The previous stake included the same amount of shares underlying call options. More importantly, Mr. Smith’s Starboard Value reached an agreement with the U.S. chipmaker under which three Starboard-nominees, Peter A. Feld, Richard S. Hill and Oleg Khaykin, were appointed to the Board. Marvell Technology Group Ltd. (NASDAQ:MRVL) also appointed Robert E. Switz as an additional independent director, so the size of the company’s Board was increased to ten seats from six. Under the terms of the agreement, Starboard Value has the right to recommend one additional independent director to the Board.
The shares of Marvell are down 25% in the past 12 months, as the company has faced mounting challenges, including an internal review of certain revenue recognized prematurely. In early March, the company’s Audit Committee also identified certain “tone at the top” issues, including significant pressure on sales and finance personnel to meet revenue targets, soon after which Chief Executive Officer Sehat Suturdja and his wife Weili Dai (President) stepped down. It has been previously rumored that Broadcom Ltd (NASDAQ:AVGO) was a possible purchaser of Marvell, but the company refuted any speculations that the two entities had engaged in discussions about a possible offer. A decrease in demand for Marvell’s storage products and the restructuring of its mobile platform business are anticipated to put weight on the company’s net revenue in fiscal 2016. Murray Stahl’s Horizon Asset Management cut its stake in Marvell Technology Group Ltd. (NASDAQ:MRVL) by 30% during the March quarter to 48,600 shares.
Let’s head to the next pages of this article, where we will discuss two other recent SEC filings.