Indianapolis Star – Clinton Group, a New York hedge fund, seems to be following a pretty specific game plan when it comes to investing in The Finish Line.
It’s a strategy that investors should watch closely. Hedge funds, lightly regulated investment partnerships, have emerged as a force in today’s stock market.
This summer, Clinton purchased 2.17 million shares of stock in the Indianapolis-based specialty retailer of athletic and leisure footwear.
In September, Clinton, which had built up a 5.1 percent stake, made a regulatory filing, asking the board to take “immediate steps to enhance shareholder value.” Clinton suggested Finish Line buy back more of its own shares and take on debt financing. Clinton also raised the possibility of more drastic actions: If its share price continues to languish, Finish Line should explore alternatives — including going private or selling itself.
The company’s management declined to comment on Clinton’s suggestions. Chief Executive Alan Cohen did tell Wall Street analysts, “We are always open to the views of our shareholders.”
The Finish Line has reason to be cautious. Hedge funds make savvy activist shareholders.
