MediaCo Holding Company (MDIA)

[dinogreeves]

"True Intentions

The difference between a Schedule 13D and Schedule 13G is pretty clear: are you an activist shareholder or not. But what if a 13D (or even a 13G) filer has other intentions besides activism? Many hedge funds and other investors follow the actions of activists very closely. When they see an activist file a Schedule 13D, they know there is the potential for a proxy contest to take place, and therefore upside for owners of a stock should the activist force the change they are after, especially if it includes the sale of the company at a significant premium. When an activist files a Schedule 13D it is like blood in the water, and other hedge funds and investors may start buying up shares as a result. But what if this is all the activist wants and has no intention of pursuing an activist agenda? Does it sound odd? It shouldn’t. It’s called stock manipulation and it happens more often than you think. What happens is the “activist” will buy up shares, knowing that others will jump in when the Schedule 13D gets filed, then when others see the filing and realize an activist is involved, they too will buy shares, driving up the price, at which point the “activist” starts reducing their position while making a nice profit."