NEW YORK (TheStreet) -- Hedge fund Maglan Capital has taken a stake in SFX Entertainment (SFXE) in recent weeks, becoming one of the company's 10 largest shareholders, after the Robert Sillerman-run electronic dance music (EDM) rollup fell out of favor on Wall Street in the wake of its October initial public offering.
The David Tawil and Steven Azarbad-run hedge fund began buying SFX Entertainment shares in recent weeks after they fell from an IPO price of $13 a share to around $7 a share in May and June. If SFX Entertainment has disappointed investors who bought into the company's IPO, it now may present an opportunity to value hunting investors like Maglan Capital.
SFX is entering the summer EDM festival season -- a time when the company expects to generate a significant chunk of its annual revenue -- and CEO Sillerman's quick work in buying a dominant position in the industry may soon become apparent to investors. If all goes as planned, Sillerman's colorful entrance into the EDM space could also soon resemble his previous endeavors in the live music industry with Live Nation and CKX.
"After a premature IPO and disappointing stock price action thereafter, SFX has completed the lion's share of it M&A and is now in a position to hit its inflection point and begin growth and profitability that should be explosive, possibly within a short period of time," David Tawil of Maglan Capital said.