Seitel (SELA) Big News

In a short break from Internet investments, one of our top seismic investment picks (our other is PGS, which keeps hitting new highs every day), Seitel (SELA) came out with big news this morning. ValueAct Capital has purchased 21,499,983 shares and warrants to purchase 15,037,568 shares of Seitel stock from Mellon HBV.

In addition Seitel (SELA) has appointed Peter Kamin, a co-founder of ValueAct Capital, and Gregory Spivy, a partner of ValueAct Capital to the Board to the Seitel Board of Directors.

I really enjoyed Kamin´s quote about Seitel (SELA) since it quickly sums up the reasons for investing in Seitel. As Carl Icahn is fond of saying, if you can´t summarize the basic investment case in one or two sentences its probably not a good idea. Well Kamen got it down to one sentence (highlighted below):

"We believe in the value of Seitel and are pleased to be actively involved with the company. At ValueAct Capital, we continue to see great potential for Seitel, a company that has the one of the largest commercial 3D onshore seismic data libraries available for licensing in North America," stated Peter Kamin. "Greg and I look forward to working together with the board and management team to enhance value to all shareholders."

With ValueAct Capital taking a more active role in Seitel, shareholders can rest assured that value will be enhanced. Incidentally, we first mentioned Seitel (SELA) in this post back in December 2005. The stock was then at about $2 and has risen over 30% since then. We mentioned PGS
  back in 10/28/2005 at about $24.50 (click here for the initial writeup). It´s up over 65% since then.
We´re still holding both stocks and will hold them throughout the current seismic boom.

For a full list of our investment recommendations since launch (excluding the recently recommended PCNTF, click here for PCNTF), you can click here.

Comments

[NewB]

I am new to small cap investing. I have been following SELA - in general and here on casinocapitalism.
I have a question:
I see that ValueAct Capital is buying up shares of SELA and now owns more than 1/3 of the Company. In general, what do these funds look to do once taking over a Company (assuming that they do become majority holders)? Do they look to take it apart and sell it in pieces? Do they try to get the stock price higher? I think this is a big factor in determining the future stock price of SELA.