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Spear Point Seeks Hostile Takeover of TheStreet

Spear Point Buyout Group sent a letter to the board of directors at TheStreet (NASDAQ: TST) challenging its current strategy and suggesting a restructuring that includes taking the company private, according to sources.

TheStreet, a company launched by CNBC personality, Jim Cramer in 1996, is up about 30 percent over the past year but down nearly 70 percent since 2008. Spear Point, a buyout firm only seven months old, believes there is a lot more value in the company but because venture capital firm, Technology Crossover Ventures owns 11.5 percent of the company in the form of preferred shares, any buyout offer would have to include at least $55 million to make TCV whole.

This, according to Spear Point, has left an overhang on the company and the stock. It currently owns about 2 percent of the company.

Spear Point founders, Nic Perkin and Ron Bienvenu said,

We own over 2% of TheStreet’s common stock and strongly believe that the company would significantly increase in value if it were to address its capital structure deficiencies. In particular, we urge the company to act now to eliminate the preferred stock overhang that diminishes value for common shareholders and inhibits the company from executing its stated strategy. We stand ready to work with the company on an initial offer for the company that we believe would be fair to all stakeholders.”

After spiking up 5 percent, shares of the TheStreet are up about 1.5 percent.

[stock-tools exchange="NASDAQ" symbol="TST" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author had no position in the company mentioned.

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