Insider Buying Recap: April 6, 2020

As markets sold-off on Friday, we saw two large purchases by activist investors. We saw a lot of buying at MGM and Zagg.

In one case the activist had a board seat and is considered an insider. he was joined in aggressive buying by other executives including the CEO and CFO.

Activist Investors in the Alternative Asset Industry

Roumell Asset Management filed a new 13D today to announce that they received a reply to the letter sent as part of 13D on March 17th suggesting that Zagg (ZAGG) consider reopening the process to sell the company. Zagg Board Chair Board Chair Cheryl Larabee, dated April 1st, welcoming their input to Board representation. Roumell outlines the resumes of the three new directors that Zagg should add to the board to help build shareholder value.

Doug Suliman, age 64, for the past ten years has been President of Breton Capital Management, LLC, a Boston-based investment firm active in both venture capital and middle-market private equity. He also serves as the managing member of Breton Funding, a special purpose vehicle established to fund the purchase of a controlling interest in, and operational turnaround of SmartEquip, Inc., a global online marketplace connecting owners and OEMs of construction equipment.

Steve Tarr, age 63, is a C-Suite Executive with 40+ years of international experience across diverse manufactured goods businesses spanning industrial, commercial wireless providers, military and big-box consumer end-users including Best Buy (NYSE:BBY), Walmart (NYSE:WMT) and Target (NYSE:TGT). Mr. Tarr is the Principal owner of Zero Spin Technologies (NYSE:ZST), based in Denver, Colorado. ZST functions in an advisory and consulting role to private equity, hedge funds, governments, public and privately held companies to solve their domestic and international business concerns.

Edward Terino, age 66, has significant board and operating management experience in B2B and B2C technology businesses.

From April 2016 until February 2019, Mr. Terino was the Chief Executive Officer of SeaChange International Inc. (SEAC), a global leader in video technology solutions to content owners, telecommunications providers and cable operators. Mr. Terino served as a member of the Board of Directors of SeaChange International from July 2010 until February 2019, where he was Chairman of the Audit Committee from April 2012 until June 2015 and a member of the Compensation Committee from December 2010 until June 2015.

Roumell also outlined strategies they believe Zagg should take immediately including selling its battery and battery charger divisions HALO to raise cash and pay down debt.

The 13D also revealed that Roumell had purchased another 141,611 shares to bring its ownership stake to 1,193,696 shares or 4% of the mobile tech accessories company since the first filing on March 17th.

Zagg insiders have been active buyers of the stock as the stock prices have fallen more than 60% in the last three months.

Insider Buying at MGM

Keith Meister the Chief Investment Officer at activist hedge fund purchased an additional 1.5 million shares of MGM Resorts International (NYSE: MGM) this week. The fund is now one of the largest owners of MGM with over 21 million shares of the company.

Paul Salem, the recently appointed Chair of MGM’s Board also put more money into the stock as he made an open market purchase of 5.9 million shares of the company. Mr. Salem is also is a senior managing director emeritus at Providence Equity Partners, a world-leading private equity firm specializing in the media and communication industries.

President and Acting CEO William Hornbuckle purchased 41,500 shares for a little over $4 million to increase his ownership in the company he oversees.

CFO Corey Ian Sanders purchased 24,991 shares at a total cost of $299,885.

Shares of MGM have declined by more than 50% during the COVID-19 pandemic inspired sell-off. Its casinos in Las Vegas are closed. The Chinese casinos are operating but they are largely empty.

Macau is not allowing most travels into the gambling mecca and hotels are being used to quarantine anyone exposed to the coronavirus.

Related: Casino “Whale” Caesars in Eldorado’s Net: Shareholders Green Light Their Merger

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