Picking a fight…

March 15, 2007

images4.jpegMost investors who file a 13D are content to let the filing speak for itself. But not the folks at Chap-Cap, who not only filed this 13-D aimed at ESpeed (ESPD) yesterday, but then also issued this press release 10 minutes later, just in case anyone missed the filing. In a nutshell, Chapman says that Espeed has consistently underperformed its peers and needs to be sold. One other interesting tidbit: volume in the stock has climbed steadily in the past week, so someone seems to have known something was up.

The filing itself makes for plenty of interesting reading, even though it lacks the acid-tinged letter that has become something of a signature for Chapman. But it didn’t exactly pull any punches, using conference call transcripts, noting that Chapman has reached out to several potential acquirers of Espeed and noting several unreturned phone calls from Espeed CEO Howard Lutnick.

Lutnick, as most people remember, makes for a very sympathetic character, given how Cantor Fitzgerald, the other company that he run lost hundreds of people on September 11, 2001. In his filing, Chapman notes how “without question, Chapman was impressed by the ability of Lutnick, the Issuer’s Chairman, CEO and President, to resurrect both the Issuer and Cantor Fitzgerald, L.P. (CFLP) following the tragic terrorist attacks on New York’s World Trade Center, where the Issuer previously headquartered its business.” That makes for a somewhat different situation than some of the other companies Chap-Cap has targeted in the past, including Vitesse Semiconductor and Sunterra

This should be interesting to watch, especially if Lutnick starts issuing his own press releases.

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