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Hey, Clinton Group, either be a shareholder activist or a day-trader — but not both.
Teen apparel retailer Wet Seal yesterday blasted George Hall’s hedge fund for simultaneously attempting to take over its board while day-trading its shares.
In a pointed letter to shareholders, Wet Seal slammed the $2.7 billion hedge fund for recent trades, including the sale of more than 127,000 Wet Seal shares in September.
“To trade like this during a consent solicitation process in which you are advocating for ‘long-term change’ is strange behavior to say the least, and it shows Clinton Group’s true colors as short-term investors with no long-term commitment to Wet Seal or its shareholders,” Wet Seal said in the letter.
Clinton Group, which owns more than 7 percent of the company’s stock, has been pressing shareholders to remove six of seven directors and replace them with five new candidates, including Mindy Meads, the former co-CEO of Aeropostale.
Clinton launched the proxy battle in late August following thwarted talks about a possible sale.
Influential proxy adviser Institutional Shareholder Services recently recommended shareholders vote in favor of two of Clinton’s candidates, including Meads and Lynda Davey, an investment banker — prompting some to forecast Clinton will win two seats.
Records show Clinton Group has been trading around the edges since the proxy battle began while growing its stake overall.
For example, Clinton recently reported that on Sept. 27 it sold 99,662 shares for $3.18 and bought 239,427 shares that day and the next for prices ranging between $3.11 and $3.16 per share, for a net acquisition of 139,765 shares.
Selling stock is unusual for an activist investor seeking board seats, experts said.
Clinton Group Managing Director Greg Taxin called the allegation “absurd.”
“We’ve been the biggest buyer of stock in this company since 2012. We bought more shares last week than the directors bought in their entire tenures,” he said.