Point Blank Solutions, Inc. (OTC:PBSO) may be a small company with a market cap of just $188 million but some investors see big value in the body armor maker. Warren Lichtenstein’s Steel Partners is one such investor who offered to acquire the company for no less than $5.50 per share in cash. Unfortunately, the company rejected the offer last year and the activist hedge fund is now nominating its own slate of directors to take over the board and presumably force a sale. So, is this a stock worth buying at these depressed levels?

Point Blank shares plummeted after former chief executive David Brooks was charged last October with securities fraud, insider trading, tax evasion, and other offenses. Prosecutors alleged that he improperly inflated corporate profits and made the company pay for personal expenses including a face-lift for his wife. The news infuriated shareholders as the stock sank from around $6.20 per share to around $2.70 per share earlier this year. Shareholders are now ready for a change as shares continue to fall as investors are losing hope.

Steel Partners then announced this week that it would be taking matters into its own hands by nominating five of its own directors to the company’s board. The activist hedge fund has extensive experience working with and maximizing the value of other public companies in the defense industry, including United Industrial Corporation, Aydin Corp., ECC International corp. and Tech-Sym Corp. Additionally, the proposed directors have extensive experience in the defense industry and could provide valuable insight for the company to turn itself around after the disaster last October.

Very little has changed materially since the $5.50+ offer from Steel Partners, so it should be interesting to see whether the offer is still on the table. If so, that would mean a 37.5%+ premium to the current market price of $3.97. Otherwise, if the firm simply works to turn around the company it could lead to even higher share prices if successful. Combined, these factors make PBSO a stock that is definitely worth watching over the next few months!

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