Hedge Fund Mangrove Partners Done With RPX Corp (RPXC)?

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If you read mainstream media, you probably know that hedge funds turned into vehicles that transfer wealth from investors to hedge fund managers. The problem is the investors. They don’t know which hedge funds are good and which are bad, so they hand their money to big hedge funds. Unfortunately, this worsens the problem because large hedge funds invest in large-cap stocks and they really can’t generate any alpha after their huge fees.

Fortunately, there are smaller, nimbler hedge funds for investors who are interested in generating meaningful alpha. Mangrove Partners is one of these hedge funds. It was founded by Nathaniel August in 2010. It returned 44% annually in its first 3 years. It also returned 26.6% in 2014 (average annual return for 2012-2014 was 20.6%). We couldn’t find its 2015 but it can’t be good. Finally, Mangrove Partners was one of the best performing hedge funds, returning 50.9% after fees in 2016.

Nathaniel August - Mangrove Partners

So how did they do it? Buy low, go activist, and sell high. Nathaniel August accumulated a 7+% stake in RPX Corp (NASDAQ:RPXC) last year by buying it at prices below $10. Mangrove last reported adding nearly 400K shares following the Brexit vote at the end of June. At that time their average price was about $8.80. Today’s filing shows that August is taking some money off the table and $11.70 is the magic number. The details of the recent purchases and sales can be seen below:

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
The Mangrove Partners Master Fund, Ltd 0 2,977,235 0 2,977,235 2,977,235 6.1%
The Mangrove Partners Fund 0 2,977,235 0 2,977,235 2,977,235 6.1%
The Mangrove Partners Fund (Cayman), Ltd 0 2,977,235 0 2,977,235 2,977,235 6.1%
Mangrove Partners 0 2,977,235 0 2,977,235 2,977,235 6.1%
Mangrove Capital 0 2,977,235 0 2,977,235 2,977,235 6.1%
Nathaniel August 0 2,977,235 0 2,977,235 2,977,235 6.1%

Page 1 of 10 – SEC Filing

(RULE 13D – 101)
(Amendment No. 4)*
RPX Corporation
(Name of Issuer)
Common Stock, $0.0001 par value
(Title of Class of Securities)
(CUSIP Number)
Christopher P. Davis, Esq.
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue, New York, New York 10176
Tel:  (212) 986-6000
 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
February 17, 2017
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [  ].
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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