Jeffrey Gendell's Tontine Associates Sells Broadwind Energy Shares (BWEN) ~ market folly

Monday, January 25, 2010

Jeffrey Gendell's Tontine Associates Sells Broadwind Energy Shares (BWEN)

Jeffrey Gendell's hedge fund firm Tontine Capital filed an amended 13D and a Form 4 with the SEC in regards to shares of Broadwind Energy (BWEN). Tontine has disclosed a 37.5% ownership stake in BWEN with 39,963,635 shares. This is a decrease from their previous holdings as Tontine sold 6,125,000 shares at a price of $5.4625 per share on January 21st, 2010. After all the sales, Tontine still owns 39,963,635 Broadwind shares. This is not the first time they've sold BWEN shares and we've wrote about their past sales as well.

Digging into the footnotes of the recent SEC filings, we see that the sales were part of an offering whereby Tontine sold shares to underwriters Macquarie Capital and JP Morgan Securities. The underwriters purchased the shares at a price of $5.4625 (as seen above) and offered them to the public at a price of $5.75 per share. This was part of an offering of common stock where Broadwind sold 10,000,000 newly issued shares, Tontine sold the shares referenced above, and Broadwind's CEO (J. Cameron Drecoll) sold 1,125,000 shares.

Tontine specializes in macro investing by taking large, concentrated positions in companies they feel are poised to benefit from select themes and will take an activist role if necessary. While Tontine returned over 100% in 2003, the year of 2008 was one to forget as their Partners fund ended up -91.5% and their 25 LP fund was -63.6%. As such, two of their hedge funds closed down and Tontine found themselves on the top hedge fund manager losers of 2008 list. However, they started off 2009 with a bang. When we checked on their performance in May, their 25 fund was up 72.3% and their Partners fund was up 49.8% for the 2009 as of that time. If anyone has year-end numbers for Tontine, feel free to contact us. For more on the 'rebirth' of Tontine Associates, we previously penned a guest post here.

Taken from Google Finance, Broadwind Energy is "a supplier of value-added products and services to the North American wind energy sector, as well as other energy-related industries. The Company provides range of component and service offerings to wind turbine manufacturers and developers, wind farm operators and service companies."

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