Pale Fire Capital takes $64.4M stake in Lightspeed

What's the deal? Czech investment group Pale Fire CapitalDealroom has a profile for this one. Try Dealroom →, led by Jan Barta and Dušan Šenkypl, has crossed the 5% ownership threshold in Canadian firm Lightspeed CommerceDealroom has a profile for this one. Try Dealroom →. Its fund holds 6,654,851 shares — about 5.1% — worth roughly $64.4 million at current prices. The group passed the threshold on September 24.

What does Lightspeed do? The Montreal-based company supplies point-of-sale systems and payment services to shops, restaurants, and golf courses in more than 100 countries. It trades in both Toronto and New York.

Why now? Pale Fire Capital began buying Lightspeed shares this year, gradually building its position. By CzechCrunchDealroom has a profile for this one. Try Dealroom → estimates, it bought at roughly the current price of around $10 per share, leaving it close to break-even on the investment.

Passive, not activist. As with its stake in US education platform Coursera, this is a passive filing confirming Pale Fire does not intend to influence control. The group crossed 10% in Coursera the day after the Lightspeed threshold. By contrast, it filed activist disclosures this year at Phreesia, Ziff DavisDealroom has a profile for this one. Try Dealroom →, and Cars.comDealroom has a profile for this one. Try Dealroom →, and previously took over management at Groupon.

The numbers. Lightspeed stock has lost about 18% since the start of the year. Yet in the quarter to the end of June, revenue reached $322.7 million with 17% organic growth, beating the company's own outlook.

Cash cushion. Lightspeed holds $372 million in cash — roughly 30% of its market value. In the same quarter it bought back and cancelled nearly seven million of its own shares, and its board approved a further buyback of up to about 10% of freely traded stock.

The signal: Pale Fire continues to hunt for undervalued, cash-rich US-listed companies trading below what it sees as fair value. Lightspeed, with cash equal to nearly a third of its market cap and an active buyback programme, fits that pattern — a bet on a cheap stock the group believes the market has mispriced.

Read more: cc.cz

Image credit: Generated with Gemini