Starboard Value LP (Trades, Portfolio), a New York-based private hedge fund, recently made a significant addition to its portfolio. On July 13, 2023, the firm acquired 61,123,595 shares in Acacia Research Corp (ACTG, Financial), a company engaged in the acquisition, development, and patents technologies. This article provides an in-depth look at the transaction, the profiles of both Starboard Value LP (Trades, Portfolio) and Acacia Research Corp, and an analysis of the potential implications of this transaction.
Details of the Transaction
The transaction took place on July 13, 2023, with Starboard Value LP (Trades, Portfolio) adding 61,123,595 shares of Acacia Research Corp to its portfolio. The shares were acquired at a price of $4.11 each, resulting in a 205.62% change in the firm's holdings. This transaction had a 3.29% impact on Starboard Value LP (Trades, Portfolio)'s portfolio, making Acacia Research Corp one of its significant holdings with a current position of 4.89%. Furthermore, Starboard Value LP (Trades, Portfolio) now holds a 61.20% stake in Acacia Research Corp.
Profile of Starboard Value LP (Trades, Portfolio)
Starboard Value LP (Trades, Portfolio) was established in 2002 by Jeff C. Smith and Mark Mitchell. The firm, which spun off into an independent company in 2011, primarily invests in undervalued small-cap companies in the U.S. public equity markets. With a focus on the technology and industrials sectors, Starboard Value LP (Trades, Portfolio)'s top holdings include Splunk Inc (SPLK, Financial), Willis Towers Watson PLC (WTW, Financial), AECOM (ACM, Financial), Salesforce Inc (CRM, Financial), and GoDaddy Inc (GDDY, Financial). As of the date of this article, the firm manages approximately $4.96 billion in total assets.
Profile of Acacia Research Corp
Acacia Research Corp, a U.S. company that went public on December 16, 2002, is involved in the acquisition, development, and patents technologies. The company operates in two segments: Intellectual Property Operations and Industrial Operations. As of July 18, 2023, Acacia Research Corp has a market capitalization of $239.479 million and a stock price of $4.09. Despite a GF Score of 62, indicating average future performance potential, the company's financial health and performance have been less than stellar, with a negative ROE of -14.72% and a negative ROA of -7.71%.
Analysis of the Transaction
Starboard Value LP (Trades, Portfolio)'s decision to add Acacia Research Corp to its portfolio could be attributed to several factors. The firm's investment philosophy centers on identifying undervalued companies, and Acacia Research Corp's current stock price of $4.09, compared to its GF Value of $12.00, suggests potential undervaluation. However, the company's financial health and performance metrics indicate potential risks, which may impact the stock's future performance. The transaction could also influence Acacia Research Corp's stock price and market performance, given Starboard Value LP (Trades, Portfolio)'s significant stake in the company.
Conclusion
In conclusion, Starboard Value LP (Trades, Portfolio)'s recent acquisition of Acacia Research Corp shares represents a significant addition to its portfolio. While the transaction aligns with the firm's investment strategy of identifying undervalued companies, it also introduces potential risks given Acacia Research Corp's financial performance. As such, the implications of this transaction for both Starboard Value LP (Trades, Portfolio) and Acacia Research Corp will be worth monitoring in the coming months.
