Activism in technology stocks is long overdue and it is refreshing to see it taking root. Robert Chapman is turning his attention to a company in a sector in dire need of external consolidation forces.
In a regulatory filing, Mr. Chapman once derided a company’s 78-year-old chairman as a “helpless Mr. Magoo-like figure” and its chief executive as “The Dummy.” Mr. Chapman’s office features a toy guillotine, a shark skull and other symbols of gruesome destruction.
“We serve eviction notices to incompetent executives,” the 40-year-old Mr. Chapman says.
Feisty activists like Mr. Chapman thrive in volatile times like these, when battered stocks can become tasty bargains. With the economy continuing to grow, distressed shares stand a better chance of rebounding. Known for his lurid taunts and knack for smart bets, Mr. Chapman has stood out as a bad boy of vulture-style investing.
Activism in technology stocks is long overdue and it is refreshing to see it taking root. Chapmans’s personal attacks and flamboyancy are typical among iconoclasts but he would do better to supplement these with more technical detail supporting his argument (See footnote 17 of ChapCap 13d filing) that Vitesse would fetch $4.50 a share in an auction.
Investors in technology stocks need additional guidance beyond the stories provided by management and the broad market. These stories are often at odds with technical or market reality, leading to valautions that are high, or in some cases, absurd. The corollary is often true when investors discard technology stocks based on short term events, group think, or unawareness of longer term market or technological trends.
Image courtesy Michael Justice/WSJ. It is waaaay over the top.