24/7 Wall St.

Pirate Capital, one of the more vocal activist investor hedge funds, is issuing a statement that various media reports are issuing misleading statements.  Here is what the hedge fund said in its press release:

Various media have published grossly misleading information regarding results at funds managed by Pirate Capital. Some reports have suggested that Pirate funds lost almost 80 percent of their value in the past year. In fact, while assets under management have decreased, average returns over Pirate’s four funds during the last year are about plus 4 percent.

Pirate Capital remains committed to its event-driven strategy to create value for its investors.

Hedgefund.net noted how Pirate Capital had frozen withdrawals from two of its funds.  This article noted that assets wouldn’t be available until positions were sold.

Reuters ran an article this week showing that assets were down considerably.  It listed its stock holdings at $478.9 million as of June 30, down from about $1.5 billion last September, according to a regulatory filing.

As always, you can go visit what Stockpickr has listed as Pirate’s last available large holdings.

Unfortunately in life in the financial markets, when things start to go bad they go really bad.  Just a few months ago, Pirate was one of the names that investors would chase into stock positions when SEC filings came across showing that Pirate had taken a stake.  Being an activist investor is a lot harder now that the financial markets have closed the window for a push to "take on debt to buyback shares" and now that use of financial leverage is once again frowned upon.

Jon C. Ogg
September 13, 2007

Jon Ogg can be reached at [email protected]; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.