FSI International, Inc. (NDAQ:FSII) shares have moved up over 7% since late last week when Chapman Capital disclosed a 6.5% stake in the company and expressed his increasing concern over the apparent divergence between ownership and management of the company in a Schedule 13D filing with the SEC. Specifically, Mr. Chapman was appalled that in approximately 75% of the fiscal quarters comprising FY2000 through FY2006 the company had reported net losses while CEO Benno Mitchell received millions of dollars in compensation. The hedge fund manager was also concerned by the fact that the CEO ran the company from the comfort of his own home. This concern was heightened when Mr. Mitchell's wife answered the telephone at Mr. Mitchell's primary place of conducting business! Since then, no telephone calls have been returned as the company continues to avoid contact with its shareholders. Consequently, the hedge fund said that they plan to solicit interest in acquiring the company by prospective strategic buyers and plan the recruitment of alternative management and corporate governors for the company. If there is significant interest in the company by other players in the semi-conductor industry, FSII shareholders could see significant upside as cost cutting could greatly enhance the profitability of this company. This makes FSII a stock worth watching!

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