A major investor in SGI wants to move the infamously fallen server vendor to the relative safety of the private sector.
According to a regulatory filing yesterday, Whippoorwill Associates will begin discussions with the company's board of directors and leading stockholders about "unlocking the company's true value," including a possible going-private gesture.
Whippoorwill disclosed to the US Securities and Exchange Commission that it owns 1,129,582 shares of common stock — or about 9.8 per cent of the company. It said it purchased the stake for about $20m.
In a 13D filing, the investment management firm contends that as few of seven SGI shareholders own 77 per cent of company stock. This concentration of ownership "has resulted in a stock price which does not fully reflect the Company's intrinsic value or the substantial operating progress achieved over the past year."
Once a dominant fixture in Silicon Valley, SGI has battled to resurrect itself after emerging from bankruptcy in 2006. Since then, the firm has concentrated on selling Xeon-based servers to a broader market rather than a niche focus on the visualization and Itanium space.
Its "progress," it would seem, has not been reflected in its stock value. Over the past year, SGI shares have lost about 70 per cent of their value. In March 2007, SGI's stock price hovered around $30. This March, shares dipped as low as $9.34. ®