TM Entertainment & Media, Inc. (AMEX: TMI) may be one of the most inactive stocks on the market, but recent developments make it worth watching. Activist investor Phillip Goldstein of Bulldog Investors sent a letter to the board of directors demanding that the company be dissolved and the proceeds be distributed to shareholders. While offering no guidance as to the potential value of a liquidation, the fact that it is being proposed at such a low price suggests that it would generate value.

According to the letter:

Opportunity Partners L.P. is a shareholder of TM Entertainment and Media,Inc. (TMI) and is part of a shareholder group that owns more than 22% of TMIs publicly held shares.

In view of current market conditions, we believe there is virtually no chance that TMI can complete a transaction by October 17, 2009.  Since its stock price is significantly below the value of the trust account, we believe it is in the best interests of TMIs shareholders to dissolve TMI as soon as possible.

Please advise us by December 5, 2008 whether the board will (1) promptly take the necessary actions to dissolve TMI and make a liquidating distribution to the public shareholders or (2) hold an annual meeting as soon as possible. At the meeting we intend to (1) propose a bylaw change to increase the size of the board, (2) nominate a slate of directors to fill all open seats, and (3) submit a proposal to dissolve TMI.

If neither a proposed dissolution nor an annual meeting is announced by Friday, December 5, 2008 we intend to file a petition pursuant to section 211(c) of the Delaware General Corporation Law in the Delaware Court of Chancery to ask the Court to summarily order TMI to hold an annual meeting to elect directors.

TMI is a blank check company that was designed to serve as a vehicle for the acquisition of an entertainment company. Now that this possibility has been eliminated given the poor markets, many investors including Bulldog are demanding their money back. Whether or not this happens remains to be seen, but if it does take place, the liquidation value could exceed the market price.

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Yahoo Inc. (NDAQ: YHOO) may have evaded one of the largest activists – Carl Icahn – but more hedge funds are coming out of the woodwork. Ivory Investment Management, which owns a 1.5% stake in the company, pushed the internet company to sell its search business to Microsoft Corporation (NDAQ: MSFT), adding to the pressure it already faces to restart talks with its rival.

The move also added to speculation that Yahoo was also intending to put itself up for sale. Recent actions by management, such as a move to lean down severance packages, had many speculating that the firm was preparing to sell itself. Investors have insisted that a sale could be a way out of this mess with Ivory insisting that the $15 billion raised could help restore its troubled finances.

Curtis Macnguyen, who manages the Ivory fund, said in a letter to the board that it was acting unreasonably in rejected Microsoft’s offer and insisted that the deal could help Yahoo improve its profits and double its slumping share price to $24, according to his calculations. In fact, if Yahoo were to retain 80% of the revenues from Microsoft’s search ads, it would boost profits by $500 million annually.

Whether or not this speculation turns out to be true remains to be seen, but Yahoo is definitely a stock worth watching given the potential gains…

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Global Med Technologies (OTC: GLOB) is trading well below its intrinsic valuation, according to at least one activist hedge fund. Victory Park Capital principal Richard Levy insisted in a letter to the board that if the equity markets do not reflect the value of the company then it is incumbent upon the board to take action to realize that value for shareholders.

As a result, Victory Park recommended one of two options:

1. Publicly auction the company for sale to a strategic or financial buyer.
2. Pursue a buyout transaction led by Victory Capital.
   

Victory Capital announced that they are prepared to purchase all of the company’s outstanding equity securities that it does not already own for $1.10 per share in cash, subject to completion of limited, confirmatory due diligence and negotiations. Moreover, they are prepared to move quickly to realize this transaction and set a deadline of December 16th for a board response.

Given that this number represents a 22% premium to the current market price for Victory Capital’s offer or even more for a competitive auction, this situation is definitely one worth watching for shareholders and investors comfortable in playing such opportunities.

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