This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Pirate Walks the Blank

Pirate Capital, a $1.8 billion hedge fund with a reputation for shareholder activism, wants your money.

The 4-year-old hedge fund filed a registration statement late Tuesday to raise $100 million in an initial public offering for a newly formed "blank check" company called Doubloon Corp. The Norwalk, Conn.-based hedge fund says Doubloon will raise cash from investors to buy an existing financial services firm, or even another hedge fund.

Over the past three years, there has been a wave of blank check IPOs, in which a company raises money in public markets before deciding precisely what to do with it. Hedge funds have been the main investors in the deals, and Wall Street has marketed blank checks as a relatively safe way for hedge funds to invest in private equity. Investors in a blank check IPO are guaranteed to get back most of their money if the company can't find a suitable business to acquire within 18 months.

Most of the people forming blank checks are former corporate executives who are able to sell investors on the strength of their resumes and business acumen. In May, for instance, Michael Gross, who helped found the $10 billion private-equity outfit Apollo Management, debuted as the pitchman for Marathon Acquisition, a planned $300 million blank check IPO.

But the Doubloon IPO is the first blank check company fronted by a hedge fund with the stature of Pirate. Maxim Group, a small investment bank that has become a big player in blank check IPOs, is the underwriter on the deal.

Pirate Capital, led by Thomas Hudson, Jr., a former Goldman Sachs (GS - Get Report) portfolio manager, will own about 20% of Doubloon after the IPO. The hedge fund, which is renting space to Doubloon at a fee of $7,500 a month, will own its equity stake through an affiliated entity.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CEC $53.98 0.00%
JRCC $0.00 0.00%
GS $166.22 1.30%
PBY $18.50 0.05%
AAPL $93.66 -0.09%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,080.89 +15.59 0.75%
NASDAQ 4,817.6280 +42.27 0.89%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs