The second times a charm for Dice Holdings (NYSE:DHX) who went public again yesterday after emerging from its 2004 bankruptcy. The website operator raised $217 million after it priced at $13/share - the top of its expected range. The IPO was especially rewarding for the company's two private equity backers, General Atlantic and Quatrangle Group, who stand to make roughly 2.7x their money in two years. Meanwhile, some investors remain skeptical as to the long-term viability of the company.

Dice Holdings initially went public back in 1998 at the peak of the dot-com boom only to end up in bankruptcy courts five years later. Since then the company has improved substantially with $83.7 million in revenues in 2006 compared to $32.2 million in 2004. The company plans to use the proceeds from its second more successful IPO to pay off more than $190 million in debt and fund general business expenses.

The real story, however, is in the private equity funds that successfully executed a bankruptcy play. The two funds formed Dice Holdings in August of 2005 and bought the company for pennies on the dollar - $138.6 million. Amazingly, they recouped most of this cost in a $107.9 million dividend payout in March. This means they are still holding shares at an adjusted purchase price of just over $18 million, putting their cost per share at around 40 cents! Perhaps this is something to consider the next time a private equity fund makes a bid for one of your stocks that seems to be underperforming in the short-term...

In the end, the long-term viability of Dice remains uncertain as their primary business is in their employment portal, Dice.com. Ideally, the company will be able to use these proceeds to pay off its debts and build itself into a cash cow that may be attractive to other larger employment portals like Monster.com (NDAQ:MNST) or even some technology-related newspapers. Combined, these factors make DHX a stock worth watching!

It's not often that an activist hedge fund pressures a company not to sell, but Gemstar TV Guide International (NDAQ:GMST) appears to be the exception to the rule! Citadel Equity Fund, the company's largest shareholder, noted in a letter to the board that they fully support the company's board and management but caution that their recent decision to explore strategic alternatives may be  in error given the company's unique market position and strong prospects for the future.

Citadel believes that Gemstar is uniquely positioned at the nexus of exciting changes taking place in video entertainment consumption, including the transition from analog to digital distribution, new platform developments (IPTV, broadband and mobile), and significant opportunity to monetize hundreds of billions of impressions garnered each year on IPG (interactive program guide) through both advertising (display and search) and transaction based services.

Despite the company's strong position in this arena, the hedge fund insists that the company's stock fails to reflect (1) the current improved state of Gemstar's operations or (2) the opportunity for independent value creation over the next several years as an increasing number of platforms take advantage of Gemstar's unique intellectual property. While the hedge fund commends the board's decision to explore options, it does not believe any bids will be made that reflect the billions of dollars of incremental equity value that could be realized over the next few years.

Citadel is one of the world's largest hedge funds with its flagship funds returning nearly 30 percent per year. It was also the first hedge fund to go public to raise funds and allow owners to cash in on their stake. Given their strong equity performance and extreme confidence in management (so much so that they would forgo an immediate premium), we have good reason to add GMST to our stocks worth watching!

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Angelica Corporation (NYSE:AGL) shares rose $0.24, or 1.08%, to $22.44 today after the company responded to Pirate Capital's request for the company to explore strategic alternatives. The news comes after the activist hedge fund pushed for the company to put itself up for sale in order to unlock shareholder value.

The textile rental company announced that it has already hired Morgan, Joseph & Co. to explore strategic options including a sale. As a result, the company requested that Pirate Capital immediately remove its proposal from the company's next proxy statement or it would request that the SEC allow it be removed due to redundancy.

Pirate Capital responded today, however, by saying that it had requested a nationally recognized investment bank to explore options - not a small firm that  has pre-existing connections with the company. The activist hedge fund noted that Joseph Morgan has been involved with the company for more than 17 months now and nothing has been accomplished. Shareholders are not simply looking for more analysis; rather, they are looking for an investment bank that is willing to search for strategic alternatives to help unlock shareholder value.

In the end, Pirate Capital and many other investors remain unsatisfied with the company. In fact, the hedge fund threatened to take action by nominating its own candidates to the company's board of directors. Investors must now wait and see how the company will respond to see what the odds look like for a possible sale of the company. This makes AGL a stock worth watching!

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Alfa Corporation (NDAQ:ALFA) shares rose $3.19, or 20.99%, to $18.39 today after it made an offer to take the company private at $17.60 per share in cash. The company subsequently announced that it has formed a special committee of the board to evaluate the offer and make an official recommendation. Shareholders are clearly banking on an increased buyout offer as shares are trading well above the buyout premium.

Alfa Corporation proposed this going private transaction in order to better compete in the personal lines insurance industry over the long-term by increasing their investment in technology and accelerating the development of their distribution channels. These objectives are best accomplished through a private, more nimble corporate structure. Finally, they believe that their current offer represents an attractive price in an increasingly uncertain environment.

Alfa Corporation has been struggling recently after its credit rating was downgraded to "A+" and earnings failed to impress. As a result, Alfa stock was trading near its 52-week low of $14.99 - and well off its 52-week high of $19.95 - before today's buyout offer. This put many current shareholders underwater in their investment, even at $17.60, which could explain why they appear to be looking for more.

It is uncertain as to whether or not the company will consider raising the buyout offer. Unfortunately, the board is likely to approve the transaction despite the somewhat low price which will make it difficult to seek a higher offer. More, the buyout entity disclosed a 43% stake in the company and indicated that they would not sell their shares to any other entity. This makes the possibility of other bidders making offers highly unlikely. In the end, unless the board finds that they offer is too low or unless a shareholder rights group gets involved, it is unlikely that a higher offer will be realized. However, this is definitely a situation worth watching.

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Sonesta International Hotels Corporation (NDAQ:SNSTA) shares rose $3.51, to 8.67%, to $44.00 today after Mercury Real Estate Partners disclosed a 9.8 percent stake in the company and expressed its belief that the company's shares are worth $110 to $125 per share. Shareholders are hoping that the company's willingness to explore strategic alternatives combined with the involvement of this activist hedge fund will lead to a substantial buyout in the near future.

Mercury Real Estate Partners supported their $110 to $125 per share valuation with an in-depth analysis presented in their Schedule 13D/A filing with the SEC. The company's largest asset is its partnership in Key Biscayne which is worth approximately $73.35 to $80.45 per share based on expected cash flows priced out at industry multiples. This value alone surpasses the current market price substantially.

The company also owns Royal Sonesta Boston, which is worth $23.24 to $28.65 per share based on the same type of analysis. Finally, the company also has other hotel interests amounting to $4 to $7 per share along with cash amounting to $5.77 per share. Subtract the combined value of these entities with the companies few liabilities and you can see how a value of $110 to $125 per share is realized.

Clearly, there is substantial value present in Sonesta that well surpasses the price the market has put on its shares. Now that the company has decided to explore its strategic alternatives, it it quite possible that it will be able to unlock this value in the near term. This makes SNSTA a stock worth watching!

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PDL BioPharma (NDAQ:PDLI) shares rose $0.49, or 1.92%, to $26.06 today after Daniel Loeb's Third Point disclosed a letter to the company's board once again calling for Mark McDade's termination and its support for a recent directive given to an investment bank to explore strategic alternatives. Many shareholders are hoping that the activist hedge fund will be able to clean up management and force the company to put itself up for sale to unlock value.

Third Point has been pushing for the termination of Chairman and CEO Mark McDade for several months now. The hedge fund contends that Mr. McDade (1) sabotaged a previous buyout offer, (2) moved the company's headquarters against the advice of his advisors at a cost of $100 million, (3) oversaw the loss of countless senior employees due to his incompetence, (4) consistently disappointed investors with poor earnings and delayed product launches, (5) failed to communicate with the analyst community to garner interest in the stock, and (6) committed several ethical violations according to former employees. All the evidence to back these claims are clearly laid out in their letter to the board.

Third Point made three recommendations to the company after meeting with them in June to discuss both Mr. McDade and the future of the company. First, the hedge fund demanded three of their own nominees be placed on the company's board. Secondly, they suggested that the company slow the progression of Ularitide and Nuvion Partnerships until all alternatives are considered. And finally, replace CEO McDade with a more competent executive that can help unlock shareholder value.

In the end, if the company heeds the hedge funds advice and decides to take action it could mean significant share appreciation for shareholders. Not only would McDade's removal pave the way towards a much more efficient company, but the strategic alternatives being explored could lead to a significant sale in the near term. This makes PDLI a stock worth watching!

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Ford Motors Company (NYSE:F) announced today that it is willing to consider offers for its Volvo car unit as it looks to raise more cash to fund its restructuring. The news comes shortly after the automaker completed the sale of its other luxury international brands that included Aston Martin, Jaguar and Land Rover. Shareholders are hoping that this additional cash will be enough to fund the automakers broad restructuring efforts aimed at returning it to profitability.

Management is banking on the proceeds from these sales to fund a broad restructuring effort aimed at reversing a $12 billion annual loss in 2006 by revitalizing its North American operations. The automaker already received a $26 billion financing package in 2006 which brought its total available liquidity up to $46 billion; however, many analysts have suggested that the company may need more to complete its restructuring efforts - hence the sale of its luxury brands.

Notably, the Volvo unit was pledged as part of the $26 billion financing package, so any offer would have to come at a substantial premium in order to justify surrendering such a large portion of its line of credit. This, however, did not stop the company from selling its previous luxury brands - so anything is a possibility.

In the end, Ford still faces many obstacles before it will be able to return to profitability. Clearly, any premium prices paid for its brands will help fund its restructuring and offers a great opportunity to consolidate its offerings. Combined, these factors make Ford a stock worth watching!

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Target Corporation (NYSE:TGT) appears to be a big hit with Bill Ackman after his Pershing Square Capital Management disclosed a 9.6 percent stake in the company, confirming rumors that surfaced late last week. Investors are hoping that the famed activist investor can help unlock value in the retail giant that has been experiencing a lower valuation than many feel deserved the company.

Bill Ackman noted in his filing with the SEC that he believes the leading domestic retailer has significant growth opportunities and strong operational management but remains significantly undervalued. While not going into any specific details, he noted that his fund intends to hold discussions with management aimed at correcting this undervaluation. Interestingly, he also noted that he would donate a third of his net aftertax profits from his Target investment to his charitable foundation - a bit of Karma for the activist!

So, what is Ackman planning for the company? Well, many analysts are speculating that the activist investor will try and push the company to sell its lucrative credit card portfolio, which has around $6.5 billion in receivables. While the company wasn't interested in selling the division earlier, many are speculating that it may be open to a sale once the credit cycle has peaked. Any move to sell this division would, however, provide a windfall of cash for shareholders that could be distributed through a special dividend or massive share buyback program.

In the end, the rumors that Ackman built up a stake in the retailer are true but we still have no idea what his plans are for the company. We just know that he believes the company's shares are undervalued and he intends to take some actions to unlock that value. This makes TGT a stock worth watching!

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Pomeroy IT Solutions (NDAQ:PMRY) is quickly turning into an interesting restructuring play for opportunistic investors. The national IT solutions provider has faced several issues over the last few years stemming from poor governance practices by key executives and management personnel. Many investors are hoping that several recent changes to the company's governance will help unlock value for shareholders and jump the company's share price.

Flagg Street Capital, who owns approximately 9.8 percent of the company's outstanding shares, took notice of these inefficiencies and has been pressuring the company towards several governance reforms. The activist hedge fund believes that such reforms could help the company increase its focus and cut down on its expenses. Earlier this year, Flagg Street Capital announced a proxy contest aimed at installing its own nominees to the company's board and enforcing change.

This move quickly caught the Pomeroy's attention. Earlier this month, the company fired its President and CEO Stephen Pomeroy after an independent committee found that certain, non-illegal conduct and actions were adversely affecting shareholder value. Even better, the company agreed on July 12th to give two Flagg Street Capital representatives seats on the company's board of directors. Combined, these events are great news for shareholders as they could lead to a much more efficient company. This makes PMRY a stock to watch!

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Target Corporation (NYSE:TGT) shares soared more than 5 percent yesterday after reports surfaced that Bill Ackman's Pershing Square has been accumulating shares in the company. The Bloomberg report cited "a person with direct knowledge of his plans" but the hedge fund refused to comment on the situation. Investors are hoping that the activist hedge fund will be able to unlock value and help the retailer improve its long-term outlook.

Bill Ackman is a well known activist investor who has managed above average returns for several years for his limited partners. While most of his investments are passive, he is well known for his activist approaches to unlocking value in large companies like McDonalds and Wendy's. Many are speculating that his involvement with Target will involve similar strategies aimed at unlocking value through the exploration of strategic alternatives. These could include a recapitalization, special dividend, spin-off of particular brands, restructuring or even an outright sale of the company.

Investors will have to wait until Mr. Ackman files a Schedule 13D with the Securities and Exchange Commission in order to figure out his plans. If the rumors of him acquiring a 5 percent stake in the company is true, then he will be forced to file with the SEC within the next 10 days. This filing should outline whether or not he is considering strategic alternatives for the retailer. Alternatively, if he ends up filing a Schedule 13G, we will know if he is in it passively for the time being. Regardless, Target is definitely a stock to watch as this situation unfolds.

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