DHI Group Stock Price Spikes After Hedge Fund Activity

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May 30, 2018

Sometimes, timing is everything.

If you’ve been following shares in DHI Group (NYSE: DHX) for the past few years, you know it’s mostly been an ugly nosedive toward oblivion for the once-mighty job board business that includes names like Dice, eFinancial Careers, and ClearanceJobs.

However, after hitting a low of $1.25-per-share earlier this month, the stock price is currently spiking after hedge fund TCS Capital Management LLC announced it had acquired a large stake in the company, as well as expressing an interest in a cash buyout. As of this writing, the stock is at $2.38 a share. At current share prices, DHI Group’s market capitalization is about $120 million.

In an SEC filing late Friday, the hedge fund said it owned about 5 million shares, or 9.7 percent of what’s outstanding, saying the company was “undervalued” and represented an “attractive investment opportunity.” TCS Capital Management said it informed DHI Group’s chairman it was open “to acquire the issuer in cash or alternatively, to acquire a significant position in the issuer” through a tender offer or open market purchases.

Good news for a company that’s been desperately seeking a golden parachute since 2016, replaced its CEO in April, and has been selling off assets like they were toxic waste since the beginning of the year. What will be interesting going forward is, assuming there’s a sale, will it be at CareerBuilder and Monster acquisition discounts? Or, seeing the appetite of companies like Recruiting Holdings to gobble up vendors in the employment space and fend-off Google, maybe a premium is in the offing?

Stay tuned.

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