As managing editor of The Bloomberg news wire has an interesting feature today on Pirate Capital LLC, a Norwalk, Conn.-based private equity firm that has won some attention in the plastics industry for its apparently successful effort to make changes at pipe extruder PW Eagle Inc.
The Bloomberg story doesn't mention the PW Eagle saga, but there's plenty of interesting stuff. It tells the tale of Tom Hudson, the renegade Pirate founder who was fired from Goldman Sachs Group Inc., and now finds himself with a full-blown mutiny:
Since May 2006, Hudson has battled trading losses and a rebellion within his firm. More than half of his two dozen employees have left, including his most- active analyst, Zachary George.Pirate is leaking money. Its assets fell to $1.56 billion as of Oct. 31 from a peak of $1.8 billion in August, according to figures Pirate has sent to investors. That figure has since fallen to $1.1 billion. Hudson's Jolly Roger Fund returned 9.5 percent in 2006, trailing a 15.8 percent return for the Standard & Poor's 500 Index. It was Pirate's worst year ever.
After his recent moves with PW Eagle, it will be interesting to see if Hudson goes after any more undervalued publicly traded plastics firms.