From a suite of swank, sun-drenched offices above an art gallery in Studio Park, hedge fund manager Eiad Asbahi has been waging a proxy war for control of a little-known pharmaceutical company, whose stock is in the tank.
The Georgia-based company, MiMedx, specializes in tissue grafts that have proven highly effective in wound care. Despite its success, however, MiMedx has been dogged by management controversies and allegations of financial funny business. And that’s made it a target of short sellers, who have published negative research about the company, helping drive down its stock price to less than $1.20 per share earlier this year.
Asbahi, the subject of Business Report’s latest cover story, knows a thing or two about negative research and short selling. It’s how his firm, Prescience Point Capital Management, has built its reputation—by betting against, or taking a “short” position, in a company he has determined to be deeply troubled, then exposing those troubles in research reports that are blasted across the financial wires and social media. When all goes well, the price of the stock falls and Asbahi profits.
But in the case of MiMedx, Asbahi did the exact opposite of what he usually does: He took a long position in a company he believes to be undervalued and published positive research detailing its overlooked upside potential. He also recruited seasoned industry experts to serve on the company’s board of directors and pushed to get them elected to the board.
It’s not the kind of high-stakes investor activism you’d expect to find happening in a suburban Baton Rouge office park just off Jefferson Highway. But then, Asbahi is not your typical Baton Rouge investment advisor. Read the full Business Report cover story.