Jeffrey Altman’s Owl Creek Asset Management has bought 2.8 million shares in Seventy Seven Energy Inc (NYSE:SSE), an oilfield services company. The holding has a current market value of $65 million and represents 5.80% of the company’s total outstanding stock.
Seventy Seven Energy Inc is $1 billion market cap company that spun off from Chesapeake Energy Corporation (NYSE:CHK) on June, 30. Since its IPO the company’s stock has declined by 5%, despite announcing an 8% increase in revenue in the second quarter compared to the previous one. On a year-to-year basis, however, the revenues decreased by 5%, to $549 million.
Owl Creek is likely to have been lured by the low stock price and pretty solid prospects given that Seventy Seven Energy Inc is backed by its bigger sister Chesapeake Energy Corporation, although the company is looking to diversify. In the last quarter revenues from non-Chesapeake customers have increased from the first quarter to $6.9 million.
In addition to Altman, Carl Icahn holds 4.7 million shares in Seventy Seven Energy Inc, acquired following the spin-off. His stake has a value of $125 million and represents just a notch under 10% of the total outstanding shares. Icahn may seek board representation or try to influence Seventy Seven Energy Inc otherwise, as he filed a Schedule 13D with Security and Exchange Commission.
Also worth noticing, Cary Baetz, chief financial officer at Seventy Seven Energy Inc has recently acquired 430 shares that have a market value of approximately $10,000.
Owl Creek was founded by Jeffrey Altman in June, 2001, after previously working as a portfolio manager at Franklin Mutual Advisers, LLC. Altman’s equity portfolio has 20 stocks and a market value of roughly $2 billion. The portfolio is fairly diversified across industries, but technology stocks take the largest chunk. The investor’s top three picks for the second quarter are T-Mobile US Inc (NYSE:TMUS), Hess Corp. (NYSE:HES) and Yahoo! Inc. (NASDAQ:YHOO).
