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He once returned some capital to his clients when he suspected his funds were getting too large, and a presentation he later made to a value investor conference made quite an impression, too.
He entitled it “Hydrodamalis Gigas,” for an extinct marine mammal better known as the Steller’s sea cow. It was a particularly obscure way to introduce one of his investment approaches, of betting against the stocks of companies that are finding it very difficult to adapt to a changing environment.
Cannell looks to invest capital in companies that have been neglected by the rest of the investment community. One of the things he looks for is how many investment firm analysts write research on a company. Zero is fine.
It means there’s a greater chance that there may be value in a company’s stock that few others in the capital markets see.
Cannell Capital is formally based in Wyoming, and its funds now own about 5.6 percent of the shares in ValueVision. Cannell first surfaced as a major shareholder in fall 2012.
Cannell briefly allied his firm with the Clinton Group, the New York-based activist leading the fight to replace the ValueVision board. That agreement was eventually terminated; he declined to discuss why.
In response to Cannell’s letter, the company’s spokesman noted that the two firms had previously worked together to get ValueVision to call a special shareholders meeting.
“Although we made several attempts to reach a settlement with Clinton and Cannell, and to prudently manage our expenses, we believe it is important that all shareholders realize how the ValueVision management team and board have worked together to transform the company and drive shareholder value,” the spokesman said in an e-mail.
Cannell said he doesn’t really relish writing critical letters to a board chairman, or pitching in on proxy fights.
“I guess I’m OK with it,” he said. “But we make a lot more money investing with people who don’t have to be told what to do.”
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