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Altai Capital Seeks Unique Opportunity With New Position in E2open Inc (EOPN)

Toby E. Symonds’ Altai Capital started a new position in E2open Inc (NASDAQ:EOPN) with the acquisition of 1,715,657 shares on December 29th. Following this purchase, the hedge fund now holds Common Shares representing 5.9% of the company’s outstanding stock. Despite the activist nature of the new stake, Altai Capital currently has not declared any plans to propose changes to E2open’s operations or management.

Altai Capital is an emerging activist hedge fund, which focuses primarily on the technology sector. The firm was founded in 2009 by Toby E. Symonds, Rishi Bajaj, and Steve Tesoriere, and currently boasts an equity portfolio worth around $326 million. Despite its preference for long/short equity strategies, Altai Capital also seeks opportunistic investments by acquiring leveraged or distressed companies. In addition, the firm is not considered an activist fund, although it does file one or the other 13D. Hence, the newly acquired position in E2open Inc (NASDAQ:EOPN) should not come with any strings attached for the company’s Board of Directors.

Rishi Bajaj - Altai Capital

E2open Inc (NASDAQ:EOPN) is a $276.3 million market cap provider of cloud-based, on-demand software solutions for supply chain management. The company’s integrated platform allows firms to collaborate with their trading partners to procure, manufacture, sell, and distribute products, thus managing unpredictable changes in demand and supply. This is achieved through a number of application software products, such as the E2open Business Network, which allows customers to exchange information regarding sales, purchases, manufacturing orders, shipments, and inventory positions, to name just a few examples. In addition to software solutions, the California-based tech company provides consulting and solution deployment services.

Yet despite being an important player in the cloud-based software solutions sector, E2open has not performed well over the past year, and is currently trading at around 80% less than its 52 week high. Nevertheless, share prices could rise considerably over the next few months if the company presents positive news at its third quarter financial results conference call, which is scheduled to take place on January 8th. Hence, if all goes well, Altai Capital could benefit significantly from this unique opportunity.

In addition to Altai Capital, E2open continues to enjoy the backing of a number of institutional shareholders. Chuck Royce’s Royce & Associates continues to own a stake of 774,600 shares, despite reducing its exposure to the company by 5% last quarter. Wilbur Ross’ Invesco Private Capital also remains bullish regarding E2open, holding a position of more than 670,000 shares that represents 0.56% of its equity portfolio. Whether holding on to this stock will pay off or not is uncertain, yet most institutional shareholders don’t look too keen on missing out on the unique opportunity presented by the company’s current situation.

Disclosure: Pablo Erbar holds no positions in any stocks or funds mentioned.