Hedge Fund T2 Partners Acquires Alloy (ALOY) Position ~ market folly

Friday, July 30, 2010

Hedge Fund T2 Partners Acquires Alloy (ALOY) Position

Hedge fund T2 Partners just filed a 13D with the SEC regarding Alloy, Inc. (ALOY). The filing discloses portfolio activity on July 21st, 2010 and reveals that Whitney Tilson and Glenn Tongue's firm have taken a 5.2% ownership stake in ALOY with 669,946 shares. This is a brand new position for the hedge fund and you can hear their other latest investment ideas at the upcoming Value Investing Congress (special discount here).

The aggregate purchase cost was $6,271,325 and they actually started buying shares as early as June 18th. While they started purchasing around $7.91 per share, the bulk of their purchases were done in the $9.50 per share range. Interestingly enough, ALOY accepted an offer from a private equity firm valued at $9.80 per share on June 24th. As such, Tilson's stake could merely be a risk arbitrage play. However, it is interesting that he started buying before the takeover. Maybe he has something else in mind because after all he did file a 13D, which signifies an activist stake. Not to mention, T2 is not normally known for going activist.

T2 has been quite busy on the portfolio front and we've detailed their bullish presentation on Microsoft, BP, and Anheuser-Busch InBev. For the rest of their current holdings, head to T2's portfolio.

Taken from Google Finance, Alloy is "a provider of media and marketing programs offering advertisers the ability to reach youth and non-youth targeted consumer segments through a range of assets and marketing programs, including digital, display board, direct mail, content production and educational programming".

You can hear Whitney Tilson and Glenn Tongue's latest investment ideas live and in person along with a ton of prominent hedge fund managers at the Value Investing Congress. The event takes place in October in New York and readers can receive a special discount to the event here.

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