Seeking Alpha – New 10% Owner/Continued Institutional Buying for Movie Gallery (MOVI): A hedgefund that concentrates on special situation investing in financially troubled and distressed clients has increased its stake in Movie Gallery (MOVI), buying the stock on the same day that its value gapped more than 50% higher on stronger-than-expected earnings.
Schultze Asset Management (â€ÂSAMâ€Â) disclosed May 17th that it now holds an approximately 4.27M-share, or 13.4%, stake in MOVI, up from a 2.77M-share, or 8.6%, stake on April 26th. The firm upped its stake by purchasing 1.5M shares of MOVI at $5.22 on May 11th, and it is now MOVI’s largest shareholder.
In its original Form 13D filing, SAM said that it wants to help MOVI reduce its debt.
“SAM intends to contact management and/or the board of directors of [MOVI] to propose a number of possible shareholder value-enhancing steps. Such steps may include, but are not limited to, a shareholder rights offering to raise funds from existing shareholders. The possible shareholder rights offering may serve to raise capital from existing shareholders in an effort to reduce bank and/or bond debt so that future interest expense may be lowered and/or to raise cash for general corporate purposes,†the firm said.
MOVI, which has been granted relief by creditors in recent months, greeted the news warmly.
