Jeffrey Eberwein, Lone Star Increase Stake in Crossroads Systems

Jeffrey Eberwein’s Lone Star Value Management disclosed that it has slightly increased its position in Crossroads Systems, Inc. (NASDAQ:CRDS) to 805,263 shares, equal to 6.7% of the company’s common stock. The position has been upped from 670,000 shares reported by Lone Star at the beginning of November, when the fund initiated an activist stake in the company.  The position involves 790,600 shares of common stock, plus around 14,700 shares in form of options to purchase common stock held by Mr. Eberwein.

The fund plans to acquire up to a total of about 1.2 million shares of Crossroads Systems, according to the purchase trading plan, which Lone Star revealed in a previous filing.

Crossroads Systems is engaged in production of various solutions for data archiving. The company has recently filed a lawsuit against Oracle Corporation (NASDAQ:ORCL), blaming it of infriging Crossroads’ patents in some of its storage systems. According to a statement from Crossroads Systems, the company “seeks monetary damages and an injunction.”

 “Crossroads invested millions of dollars in developing and protecting the technology covered by our patents and we are committed to pursuing those remaining companies, like Oracle, who continue to use our patented technology without a license,” the statement quoted Crossroads’ interim President and CEO, Richard K. Coleman as saying.

The stock of the company is down by over 40% since the beginning of the year.

In addition to Lone Star, which just recently joined the family of Crossroads shareholders, some other hedge funds also hold long positions in the company. Millennium Management, led by Israel Englander owns around 436,500 shares according to its latest 13F; Mark N. Diker’s Diker Management reported holding some 316,000 shares of the company.

Disclosure: none

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