Groupon holder Windward Management discloses 8.9% stake

Windward Management, which disclosed an 8.9% stake in Groupon, disclosed in an SEC filing a letter sent to Dusan Senkypyl, the company’s Chief Executive Officer, expressing “conviction in the (company’s) recovery and explaining how the (company) is significantly undervalued.” The letter states in part: “I have very much enjoyed our conversations over the last several months and appreciate your initiative, on behalf of shareholders including myself, to help turn the ship around at Groupon. As long term deep fundamental investors, we are highly cognizant that turnarounds take time with bumps along the way. That being said, our diligence suggests that the opportunity here is vast and not even remotely understood by the market… Given our large investment in the company, we thought it made sense to file a 13D so that we could engage in a more comprehensive manner with the company and provide some input should you find it helpful… Despite the fact that our average cost is $6.42, our conviction level is higher, as we file today at $11, given we continue to build evidence that our thesis is correct and the catalyst path grows more imminent. Below, we will delineate our investment case for $55 or 5x from here over the next 12 months. Given the asymmetric upside we see over a relatively short period of time, we have structured our position with both stock and options. Our options positions, many of which are in the money, form the majority of our 8.9% position in the company. These calls are high delta and longer-term options, allowing us to pick up more leverage should we recognize the explosive upside we envision playing out.”