David Einhorn of Greenlight Capital, bought a 9.99% stake in Civeo and declared CEO Bradley Dodson should be given the boot for losing shareholders’ confidence, as reported by CNBC. Einhorn said he discussed the issue with the board and management before issuing the statement. Apparently, shareholders like Einhorn more than Dodson, as shares of Civeo spiked 11% after hours on the announcement after closing down 4%.
Civeo provides temporary housing and support for workers on oil rigs. Shortly after Greenlight started purchasing shares, Civeo announced plans to move headquarters to Canada, presumably for tax advantages. Prior to this announcement, Civeo management was pondering whether it should become a real estate trust.
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In a regulatory filing, Greenlight urged Civeo to take on leverage, “to make its capital structure more appropriate for a real estate company” and urged an “aggressive program of returning capital to shareholders.”
Civeo hasn’t done well on its own after having been spun off from Oil States International in June; the stock is down 40%.