How to get an A on your 13-D

by Kaiser Edamame

Bob Chapman is a shark or killed a shark or is a shark because he killed a sharkI know you’ve all been wondering about the big question. Would it be possible to work the terms “skin flute” and “chief ankle grabber” into one SEC filing? Well you can stop wondering. Bob Chapman -the alleged inventor of the 13D letter– has done it. For a true Christmas treat please do read the full text of his most recent sketch comedy letter to management (last two pages of this Glenayre Technologies 13D).

A small sample:

On numerous occasions, Chapman Capital has received telephone calls from individuals claiming to be parties other than themselves (“pretexting”), with the occasional delivery of profanity as part of this impersonation. In fact, several months ago we received a call from someone apparently pretending to be “Jimmy Caparro,” who demanded that I personally “genuflect before [him] and play a song on [his] ‘skin flute’.” Though I do not have any knowledge of Mr. Caparro’s sexual preference, I was confident that Mr. Caparro was not the person making that call, even in the highly unlikely event that that this may have been his personal fantasy.

Not only can he write, but Mr. Chapman also claims to have charged wild gorillas, snapped two vertebrae while body surfing, snuggled with a cambodian jaguar in a hammock, and showed up for his first job interview bleeding from the head after a near-fatal motorcycle accident. I’m reading all this thinking, wow, this guy really understands risk and reward, I would like to give him all my money and trust him to prudently preserve and grow it.

As with any larger than life personality he has lovers…(quotes from (free reg required))

the best part of his whole persona is that any woman/girl who’s dated him knows what a sweet guy he actually is. My bet is that any detractor on this thread is simply jealous — what a life Bob has led and he’s not even 40 yet! Take it from someone who’s “been there,” the guy rocks.

…and haters

Bob Chapman’s ego is the size of kentucky. He is an over-rated piece of trash. Treats people like garbage and thinks he is a gift to the earth. He manages a small hedgefund in california because he can’t hack it in NYC. His attitude definitly is the cause from having a small penis and being a virgin. He needs a good ass kicking because he is one of the most horrible people I have ever met. I bet he got butt f*cked by one of those monkeys and liked it.

Chapman, we know your legend's realRecommendation: We think Chapman’s overexposure creates liquidity in the otherwise uninteresting hedge fund manager sector. We think there is easy arbitrage money to be made buying his sense of humor and bohemothic vocabulary while simultaneously selling his life insurance policy. This creates a synthetic long exposure to SEC-filed gay jokes but limits your downside risk in case he decides to go nude-snowboarding with the abominable snowman.

Related Reseach:

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  1. ArbMan
    December 21st, 2006 | 11:16 am

    The trade you proposed wouldn’t achieve the result you are looking for. Selling his life insurance policy would be the equivalent of selling a put on his life, meaning that you are doubling your downside exposure rather than eliminating it. To properly execute the trade, you would buy a life insurance policy on him, which would pay off in the event of his untimely demise.

  2. December 21st, 2006 | 11:28 am

    arbman – you’re right and i should’ve been more clear. i was thinking of “holding” the life insurance policy as being the INSUR-ER, not he INSUR-ED. hence all the payouts reverse – if I’m the insurer i want to sell his policy to someone else before he dies so i don’t have to pay it out. your way is more clear, but my way lets me stay true to the namesake of the site.

  3. me
    December 21st, 2006 | 1:35 pm

    I don’t know which was funnier, his letter or your observations of it. I laughed my ass off.

  4. ArbMan
    December 22nd, 2006 | 8:55 am

    one more thing – you call the hedge fund manager sector “otherwise uninteresting”. While I would generally agree that the broader hedge fund manager sector does not provide attractive opportunities for investors in this space, I would point out that the “activist investor” subsector of the hedge fund manager space has quite a few interesting opportunities. From walking thesaurus Dan Loeb of Third Point to howling-at-the-moon legend Carl Icahn, I think any investor should be looking for the right kind of exposure (with appropriate risk controls, of course)in this space

  5. anon.
    December 22nd, 2006 | 3:40 pm

    I have had the opportunity to work with Bill on a few occasions and I can tell you from personal experience that he is an exceptional attorney in all aspects of the law (but particulary in high yield debt offerings).

    In addition, (as is so rarely the case with highly successful attorneys) Bill is a genuine and considerate person who works hard for his clients, respects his associates and their opinions (no matter how junior) and makes a point of spending time with his family.

    In short, Bill Schwitter is a class act and one hell of an attorney.

    If it had been anyone else, I am quite sure that you would have seen a strong reaction from investment community in response to this leter. Thankfully, no one takes Mr. Chapman seriously as an investment professional, so such a response is not necessary.

  6. 2L
    March 16th, 2007 | 6:01 pm

    “Not only can he write”

    Activist 13D Letter Writer/Editor: write original and edit/proofread activist 13D correspondences from Chapman Capital to Fortune 1000 CEOs and Boards of Directors. Writers/editors must have articulate and witty approach to written communication.