Monday, December 10, 2012

Meade Loses 1/3 of Market Cap Due To Mistake?

Meade (MEAD) shares fell by almost 30% today, seemingly on news that Hummingbird Management has cut its stake in the company from 7.63% to 3.24%. There may be reason to believe the filing is a mistake and that Hummingbird hasn't actually cut its stake, however.

According to the 13D appearing under Meade, the issuing company has 2,851,105 shares outstanding1. But Meade has only 1.3 million shares outstanding!

There is a company with 2,851,105 million shares as of its last report. It's called Tel-Instrument Electronics. Furthermore, Tel-Instrument Electronics is listed as the issuer in the 13D, even though it is filed under Meade. There is one mention of Meade in the filing, but this could be where the mistake is made. It's possible that whoever filed this used Hummingbird's Meade 13D as a template and forgot to change this final reference to Meade.

Finally, the electronic name of the file containing the filing is interesting. It's called "tik13da-121210.txt". It just so happens that the first three letters (TIK) is the stock symbol for Tel-Instrument!

Is it possible that Meade fell 30% because of a filing mistake? If so, does it rise 50% tomorrow to recover its previous level?

I sent a message to Paul Sonkin of Hummingbird asking him for clarification but have not yet heard back.

Disclosure: No position

1 From the filing: The aggregate percentage of Shares reported owned by each person named herein is based upon 2,851,105 Shares outstanding as of November 14, 2012 which is the total number of Shares outstanding as reported in the Issuer's quarterly report on Form 10Q


Hester said...

Couldn't possibly be the case, markets are obviously perfectly efficient.

Jon said...

It looks like you're right. I think what happened is Hummingbird mistakenly submitted the same 13-D originally prepared for TIK to both TIK and MEAD. If you look at the filings for TIK, the exact same document appears. Good find!

Anonymous said...

Eh, you sure they didn't just use TIK as a template, and then forget to change a lot of the info? I see Sonkin listed among major holders of MEAD, but not TIK.