Mangrove Partners Master Limited Fund has trimmed its position in RPX Corporation to under the 5% ownership threshold. For those unaware, once a shareholder owns more than 5% of a publicly traded company, the shareholder is required to file a schedule 13D with the Securities and Exchange Commission. Scanning recently filed 13D's can be a great technique for finding significant, positive catalysts for the issuer (public company) identified in the filing.
Mangrove's 13D Filing on Friday (May 12th)
In the case of RPX, however, the most recent 13D filed with the SEC is a negative catalyst. Mangrove Partners, an investment management partnership with a Cayman Islands feeder-fund, owned over 5% of RPX. Unfortunately, Mangrove cut its stake in RPX over the past week and a half which has resulted in the fund falling under the 5% threshold.
Here is the breakdown of Mangrove's trading activity in RPX from the last 60 days, according to the 13D Filing:
Potential Reasons for Selling
The significance of this event is that Mangrove continued to sell its shares with seemingly little regard of the market impact (negative price reaction). Naturally, current RPX shareholders should be concerned that Mangrove is going to completely liquidate its stake. It is possible that the firm is selling shares to free capital for a different investment; nevertheless, the market may well react to this idiosyncratic news in the pre-market and auction open on Monday morning.
Additionally, Mangrove may be selling due to RPX's poor financial performance over the past year. On a year-over-year (yoy) basis, RPX's net income declined over 50% this year.
RPXC Stock Rating
Based on fundamental analysis of the company's underlying business economics and recent financial performance, it appears there could be more tough times ahead for RPX. Combined with the recent activity from Mangrove Partners, RPX is hereby added to the List of Bearish Opinions.
About RPX Corporation
According to Yahoo Finance, RPX's business profile is as follows:
RPX Corporation provides patent risk management and discovery services in the United States, Japan, South Korea, and internationally. It offers a subscription-based patent risk management service that facilitates exchanges of value between owners and users of patents. The company also provides a defensive patent aggregation in which it acquires patent assets to offer clients with sub-licenses; and underwrites patent infringement liability insurance policies to insure against certain costs of litigation. In addition, it offers its clients with access to its proprietary patent market intelligence and data. Further, the company provides a range of technology-enabled services, including data collection and forensics, data processing and analytics, data hosting, project management, data production, and document review services to streamline the administration of litigation matters, internal and external investigations, regulatory compliance, and other matters. Its clients include companies that design, make, or sell technology-based products and services, as well as companies that use technology in their businesses; and corporations and law firms. RPX Corporation was founded in 2008 and is headquartered in San Francisco, California.