Savvy Trades and Investments

[hweb2]

I've been adding to SPRT. Nice catch on the renegotiated hosting fees. That lower expense should continue to benefit the bottom line in the coming quarters.

Found something interesting on the subject of who would be selling so cheap. Today was a rough market day so lots of stocks were down. But normally it doesn't make sense for anyone to be selling a stock in the low $2's that just reported a stellar Q1 with earnings of .08/share and is sitting on a fantastic balance sheet with $2/share in cash. The answer seems to be Eric Singer and his VIEX funds.

This SC 13D/A filing from 4/5/19 shows VIEX was selling. About 315K shares from 3/13/19 to 4/3/19, at prices mostly in the $2.20's:

https://www.sec.gov/Archives/edgar/data/1104855/000092189519001028/sc13da910114013_04052019.htm

Why sell so cheap I have no clue. Looks like Singer & VIEX tried to play the role of activist investor back in 2016 when they had an even bigger stake:

https://www.prnewswire.com/news-releases/viex-issues-letter-to-fellow-supportcom-stockholders-300282871.html

SPRT started a big turnaround on their own last year with a new CEO. So maybe Singer has now given up. Maybe they're dumping their position out of spite. I think it's a strong bet that VIEX has continued selling in mid-late April, and then really unloaded into the volume we got with earnings last week. SPRT traded over 1M shares on earnings day alone. Since then, it's been a slow bleed lower as there's been a large seller camped out on this one. The good news is I'm guessing the number of shares they have left is dwindling. When Singer/VIEX is out, I believe SPRT rallies sharply to more appropriate valuation (I'd be buying the stock at $4). Looking forward to the next SC 13D/A filing to confirm that VIEX is the seller and how many shares they have left.

Wish the company would just do a dang stock buyback and clear out this share overhang. But at least we've got an opportunity to buy SPRT at a ridiculously low valuation. I know I've done my part to soak up the VIEX shares haha