New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Guru News and Commentaries
Guru News, Stock picks and commentaries
New Topic
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicLog In
Prem Watsa Takes Another Stab at SandRidge, After TPG-Axon Sends Third Heated Letter to Board
Posted by: Dianne Tordillo (IP Logged)
Date: December 27, 2012 04:33PM

Today, Fairfax Financial Guru, Prem Watsa, has increased his stake in controversy-ridden SandRidge Energy (SD) by 9.12 percent, reported by GuruFocus Real Time Picks.

This latest transaction adds about 5 million shares to Watsa’s last reported holding, bringing his total share count to 59,526,646 shares.

The last time he increased his stake in SandRidge was November, when he added 1,152 percent, bringing his ownership to 10.5 percent of shares outstanding, at the time. (To read more about his previous stake increase, read Prem Watsa Surges in SandRidge Stake, Amidst Company Management Shakeup.)

Watsa’s move on the energy stock came just days after TPG-Axon Capital, who is 6.7 percent owner of SandRidge’s outstanding shares, sent its third letter to the company’s board of directors, breaking the news that it has filed a lawsuit to The Delaware Chancery Court to dispute the validity of the initial consent date that SandRidge declared in its Dec. 21 8-K filing, claiming that the company is intentionally making the voting conditions more difficult for shareholders in the process of replacing SandRidge’s current board of directors.

Other barriers, which TPG-Axon included in the letter claiming SandRidge’s management has placed a burden on shareholders in the voting process, include putting a poison pill in place and issuing an additional $37 million of shares to senior management.

“Now, the company attempts to shorten the period of time in which shareholders have to vote, claiming it has received consents in our solicitation – which is impossible as we have yet to even request them!” said Dinakar Singh, founder and CEO of TPG-Axon. “These are all just additional examples of Tom Ward and the Board of Directors’ utter disregard for shareholder interests.”

In addition to the recent lawsuit brought upon SandRidge, and aside from TPG-Axon announcing a number of more recent “disturbing facts that have recently been brought to their attention,” TPG accused SandRidge CEO Tom Ward and his son Trent of engaging in the unethical act of front running the company.

“We demand the Board disclose the degree to which it was aware of these actions. If the Board was unaware of these activities, then you should take immediate steps to investigate these serious transgressions and seek redress,” CEO Singh said. “On the other hand, if you were aware of the nature of these activities, then it is clear that you have been willing enablers of the greedy and unethical behavior that has caused enormous damage to shareholders.”

These aggressive attempts to overthrow and replace SandRidge’s management have been plaguing the company for months, as TPG-Axon, and other shareholders continuously released what they felt were reasons upon reasons for the company’s mismanagement.

This fact doesn’t seem to faze Watsa, however, who has deluged his portfolio with SandRidge shares, since only starting out with 280,000 shares in the third quarter of 2008.

Currently, SandRidge stock is up 0.8 percent, at $6.31 per share, a few minutes before the market’s close. Year to date, SandRidge’s market value has gone down about 23 percent.

SD data by GuruFocus.com

View more of SandRidge's data on 10-Year Financials. Also view the rest of Prem Watsa's latest portfolio picks here.

About GuruFocus Real Time Picks

GuruFocus Real Time Picks alerts you of the stock purchases and sales that Gurus have made within the last two days. Follow your favorite Gurus closely with GuruFocus' Premium Membership! If you are not a Premium Member, we invite you for a 7-Day Free Trial.



Guru Discussed: Prem Watsa: Current Portfolio, Stock Picks
Stocks Discussed: SD,
Rate this post:

Rating: 4.5/5 (11 votes)



Re Prem Watsa Takes Another Stab at SandRidge After TPG-Axon Sends Third Heated Letter to Board
Posted by: kfh227 (IP Logged)
Date: December 27, 2012 07:02PM

Questions that need answering.

1) What are TPG's issues? All of them.
2) Are claims in (1) bogus.

I've been piggybacking Prem (and am in the green thanks to some limit orders to buy at $5) for no real good reason.



Guru Discussed: Prem Watsa: Current Portfolio, Stock Picks
Stocks Discussed: SD,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Prem Watsa Takes Another Stab at SandRidge After TPG-Axon Sends Third Heated Letter to Board
Posted by: vgm (IP Logged)
Date: December 28, 2012 01:48AM

Kfh227,

You make an interesting point. TPG lays out its concerns with startling clarity in its letters. Yet judging by Prem Watsa's buying, he does not share those concerns. As far as I understand, Watsa and Ward are friends, but I can't believe he'd allow that to cloud his investment judgement for Fairfax. The very name Fairfax is derived from 'fair friendly acquisitions' and Watsa has a towering reputation.

If TPG's claims are unfounded, I'd expect Ward and the SD board to come out with rebuttals.

I remain perplexed - but a believer in Prem.



Guru Discussed: Prem Watsa: Current Portfolio, Stock Picks
Stocks Discussed: SD,
Rate this post:

Rating: 0.0/5 (0 votes)



Re Prem Watsa Takes Another Stab at SandRidge After TPG-Axon Sends Third Heated Letter to Board
Posted by: ramands123 (IP Logged)
Date: December 31, 2012 10:57AM

Thanks for the artical



Guru Discussed: Prem Watsa: Current Portfolio, Stock Picks
Stocks Discussed: SD,
Rate this post:

Rating: 0.0/5 (0 votes)





Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK