Activist Trading and Fortress’s Intrawest Deal

Private equity shop Fortress’s $1.8-billion deal for Intrawest is interesting on a number of levels. It can be seen as a play on a debt-loaded resort operator that has significant earnings leverage to the 2010 Whistler Olympics.

It can also, however, be seen as further validation of activist-based trading strategies. Pirate Capital, which owns 16.5% of Intrawest, pushed hard for Intrawest to make a company sale, and it is now up more than double since January of 2003. If you had simply piggy-backed Pirate into the shares you would have done very well indeed.

Mind you, naively following activist investors into every stock is not a smart strategy. Just look at the pain Penn Capital is feeling over its big Imax holding. The stock lost 41 percent yesterday, which hurts Penn which had been wangling for a buyout.

Comments

  1. “Wangling”?!?
    Good one. I can’t even find that in the AOL query data. But, alas, wangling.{com,net,org,info} are all taken… Domain parked, targeting fisherman with gloves on, I guess.

  2. Wangling is in yourdictionary.com. Excellent word. Excellent points in the article. Don’t be a wanker, John.

  3. Riff Raff says:

    Your wangling is dangling cause the chump change in yo pockets be jangling.