Medifast Inc (MED): Engaged Capital Buys Shares; Intermountain Community Bancorp (IMCB): Ulysses Management Closes Stake after Merger

In a new filing with the US Securities and Exchange Commission, Glenn Welling‘s Engaged Capital reported picking up its position in Medifast Inc (NYSE:MED) to 688,000 shares from 558,000 shares held previously, raising the activist stake to 5.4% of the company. In another filing, Joshua Nash‘s Ulysses Management revealed selling its entire position in Intermountain Community Bancorp (NASDAQ:IMCB), previously holding 260,000 shares.

Medifast, Inc. (NYSE:MED)

Mr. Welling is an activist investor who around a month ago increased his fund’s activist stake in Volcano Corporation (NASDAQ:VOLC) to 2.64 million shares from 2.02 million shares and went activist, controlling 5.1% of the company. Mr. Welling sent a letter to the company’s board of directors, accusing it of the company’s underperformance and damaging the company’s value. In this way, the investor urged the board to take some measures such as exploring the opportunity to sell the company, or to at least replace its top management. Also in September, the manager of Engaged sent a letter to the principal and CEO of Oplink Communications, Inc (NASDAQ:OPLK), expressing his frustration with the Board refusing to the investor’s previous proposal, letters, and refusal to negotiate over some important issues. Moreover, at the end of July, Engaged Capital initiated an activist stake in Jamba, Inc. (NASDAQ:JMBA), which contains 1.2 million shares, equal to 7% of the company. The stock started to grow during the next several months, although in October it slumped to around $12 per share, from previous heights of around $14.

Engaged Capital has also entered into a stock purchase agreement with Medifast Inc (NYSE:MED), under the terms of which the investor agreed to buy around 573,200 shares of the comapany. The fund’s current stake also includes 100,000 shares that can be purchased upon the exercise of ‘Call’ options. Engaged Capital initiated a stake in Medifast Inc (NYSE:MED) during the first quarter and initially held 600,000 shares, later trimming the position by 8%. The stock of the small-cap weight and disease management products company appreciated by around 15% year-to-date.

Aside from Engaged, another investor holding shares of Medifast Inc (NYSE:MED) is Jacob Gottlieb’s Visium Asset Management, which owns 1.35 million shares as of the end of June. Moreover, Christopher Shackelton and Adam Gray Coliseum Capital disclosed ownership of 893,700 shares in its latest 13F, the position amassing over 9% of the fund’s equity portfolio.

So far during 2014, amid the stock gaining ground, insiders have been selling some of the shares they own. In August, Jeannette Mills, executive vice-president of Medifast Inc (NYSE:MED), sold 3,000 shares at $28.03 per unit, trimming her stake to 20,116 shares.

Now let’s look into Ulysses Management’s investment in Intermountain Community Bancorp (NASDAQ:IMCB), which recently merged with Columbia Banking System Inc (NASDAQ:COLB). Both companies entered into a merger agreement in July, under the terms of which shareholders of Intermountain Community Bancorp received 0.6426 shares of Columbia Banking System’s common stockk and $2.2930 in cash for each share of Intermountain Community Bancorp.

Ulysses Management has been a long-term shareholder of Intermountain Community Bancorp (NASDAQ:IMCB), owning shares since the first quarter of 2013, while the stock gained over 50% since then. Initially the fund held around 2.1 million shares of the company.

Alexander Medina Seaver’s Stadium Capital Management was another shareholder of Intermountain Community Bancorp (NASDAQ:IMCB), owning around 378,800 shares as of the end of June.

Disclosure: none