Nantahala Capital Management's Latest Activity

Wilmot Harkey's hedge fund Nantahala Capital Management recently filed two 13D's with the SEC.  The hedge fund primarily focuses on small caps and has a market-neutral discipline.

Imperial Holdings (IFT)

First, they've disclosed a 9.65% ownership stake in Imperial Holdings with 2,045,707 shares. The filing was made due to activity on May 10th and marks a .6% increase in their position size since the beginning of the year. 

In the 13D, Nantahala includes a statement in the purpose of transaction section:

"Bulldog Investors General Partnership, pursuant to an authorization statement dated April 25, 2012, which has been filed with the Securities and Exchange Commission, is soliciting from shareholders of the Issuer authorizations to demand a special meeting of shareholders to, among other things, amend the bylaws of the Issuer to increase the number of directors from seven to twelve and to elect five directors to fill the vacancies created by such increase.  The Reporting Person has determined to execute the revocable authorization supporting the calling of such meeting with respect to Shares reported in this Schedule 13D because it believes that it is in the best interests of shareholders for a meeting to be held to consider such matters. "

Per Google Finance, Imperial Holdings is "a specialty finance company with a focus on providing premium financing for individual life insurance policies issued by insurance companies and purchasing structured settlements backed by annuities issued by insurance companies or their affiliates. In its premium finance business it earns revenue from interest charged on loans, loan origination fees and agency fees from referring agents. In its structured settlement business, it purchases structured settlements at a discounted rate and sells such assets to, or finances such assets with, third parties."


Adams Golf (ADGF)

Second, the hedge fund has also filed an amended 13D on Adam's Golf (ADGF) and they've sold over half their position in the name.  They now own 3.927% of the company with 313,960 shares.  They sold on May 8th at a price of $10.75.

A few months ago, it was announced that TaylorMade-adidas Golf Company was acquiring Adams Golf for $10.80 in cash (shares currently trade around $10.78).  It appears as though Nantahala is ready to put some of this capital to work elsewhere with the deal spread pretty tight.

Per Google Finance, Adams Golf "designs, assembles, markets and distributes golf clubs for all skill levels. The Company’s products include Idea Tech V3 irons and hybrids, Idea a7 and a7 OS irons and hybrids, Speedline Fast 11 and Speedline 9064 drivers, Speedline Fast 11 fairway woods, and Idea Pro Black hybrids and irons."


For more from this hedge fund, we've posted up Nantahala's other recent portfolio activity here.

Nantahala Capital Discloses New Positions in Regional Management (RM) & Pinnacle Airlines (PNCLQ)

Wilmot Harkey's hedge fund Nantahala Capital Management recently filed a slew of 13G's with the SEC. We recently also disclosed their new stake in Scientific Learning.

From the new batch of filings, Harkey's firm has revealed a brand new position in Regional Management (RM). They now own 5.275% of the company with 649,465 shares and the filing was made due to portfolio activity on April 5th.

Per Yahoo Finance, Regional Management is "a diversified specialty consumer finance company, provides loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other traditional lenders."

Second, Nantahala Capital has also revealed a new stake in Pinnacle Airlines (PNCL now trading as PNCLQ). The company recently filed for bankruptcy protection to tackle its debt and costs. Shares were delisted due to failure to satisfy a continued listing rule and now trade on the pink sheets.

Harkey's fund disclosed a 9.825% ownership stake in Pinnacle with 1,879,232 shares. The 13G was filed with the SEC due to trading activity on April 4th. Just last week we highlighted how Mohnish Pabrai sold Pinnacle shares.

Per Google Finance, Pinnacle Airlines is "an airline holding company based in Memphis, Tennessee. It is a parent company of three wholly owned subsidiaries: Pinnacle Airlines, Inc., Colgan Air, Inc. and Mesaba Airlines."


About Nantahala Capital

The hedge fund runs a fundamental strategy with a primary focus on small cap stocks. They have a market-neutral discipline as they take a balanced risk management approach (their long book resembles their short book). They focus on expected return on capital. Though we haven't seen more recent numbers, as of mid-year 2010, Nantahala had seen a 19.2% net annualized return over 5 years.

Wil Harkey founded the firm in 2004. Prior to founding Nantahala, he worked at Sagamore Hill Capital where he focused on capital structure arbitrage. He earned his BA in Mathematics and Economics from Williams College. Dan Mack joined as co-portfolio manager in 2007. Prior to that, he also worked at Sagamore Hill Capital focusing on event-driven and convertible arbitrage strategies. He earned is BS in Economics and a BSE in Computer Science and Engineering from the University of Pennsylvania.

See some of Nantahala's other recent portfolio activity here.

Nantahala Capital Management Discloses Stake in Scientific Learning Corp (SCIL)

Wilmot Harkey's hedge fund Nantahala Capital Management filed a 13G with the SEC regarding shares of Scientific Learning Corp (SCIL). In it, they reveal a 7.79% ownership stake in the company with 1,849,672 shares.

The filing was made due to activity on March 28th, 2012. On that date, Scientific Learning had settled a private placement of $7.2 million worth of common stock and warrants. The company sold 4.2 million shares of stock and warrants representing 2.5 million shares. These warrants have an exercise price of $1.82.

This is a newly revealed position for the hedge fund as they did not report owning a stake in their last disclosure as of December 31st, 2011.


About Nantahala Capital

This is the first time we've covered Nantahala's movements so here's some background: The hedge fund runs a fundamental strategy with a primary focus on small cap stocks. They have a market-neutral discipline as they take a balanced risk management approach (their long book resembles their short book). They focus on expected return on capital.

Though we haven't seen more recent numbers, as of mid-year 2010, Nantahala had seen a 19.2% net annualized return over 5 years. Wil Harkey founded the firm in 2004. Prior to founding Nantahala, he worked at Sagamore Hill Capital where he focused on capital structure arbitrage. He earned his BA in Mathematics and Economics from Williams College.

Dan Mack joined as co-portfolio manager in 2007. Prior to that, he also worked at Sagamore Hill Capital focusing on event-driven and convertible arbitrage strategies. He earned is BS in Economics and a BSE in Computer Science and Engineering from the University of Pennsylvania.


About Scientific Learning

Per Google Finance, Scientific Learning Corp "distributes the Fast ForWord family of software. The Company creates educational software that accelerates learning by improving the processing efficiency of the brain. Its products are marketed primarily to K-12 schools. The Company’s products are marketed in 45 countries globally. It offers an online data analysis and reporting tool that uses algorithms to provide diagnostic and prescriptive information and intervention strategies."