Special Situations Digest #36

Blue Duck Capital urged Snap Inc. (SNAP) to sell a 20% stake in its SPECS augmented reality business for $1 billion. The proposal values the SPECS unit at $5 billion and would leave Snap with 80% ownership. Blue Duck estimates the funding would cover two years of development costs at $500 million annually. Snap's next earnings report is scheduled for 2026-11-04. The activist is pushing for a separate funding event to target a stock price of $12-$14, compared to a recent price of $6.26.

Hard Rock Holdco LLC and Kevin Jay Hayes, Jr. report beneficial ownership of 85.2% of Omnitek Engineering Corp common stock. The 85.2% is based on 750,000,000 shares issuable upon conversion of 15,000 Series A Preferred shares, plus 21,948,091 shares outstanding and 108,333,333 warrant shares. Hard Rock purchased 5,000 Series A Preferred shares for $500,000 in a Tranche 1 closing on September 29, 2026 under a Preferred Stock Purchase Agreement dated September 27, 2026. Hard Rock acquired 10,000 Series A Preferred shares by exchanging all membership interests of Hard Rock Ready Mix LLC to the Issuer, closing October 1, 2026. Each Series A Preferred share converts into 50,000 common shares with no further consideration and no stated expiration date. The Reporting Persons state their actions may constitute a 'control purpose' under the Securities Exchange Act of 1934. A Tranche 2 purchase of an additional 5,000 Series A Preferred shares for $500,000 is required to occur no later than 90 days after the Tranche 1 closing date.

Blantyre Capital II Limited disclosed a 28.9% stake in National CineMedia, Inc.'s common stock. The Schedule 13D was accepted on Oct. 09, 2026. On May 7, 2026, National CineMedia's board elected Mark Sardi as a member of the Board in accordance with the Director Designation Agreement. Blantyre Capital II cites governance rights linked to a Director Designation Agreement that shaped recent board changes. Blantyre Capital II Limited is incorporated in the Abu Dhabi Global Market and manages assets of private funds.

Ariel Investments urged Mattel (MAT) to consider selling assets, merging, or selling the entire company in a letter to the board. The firm now owns 5.4% of the company. This follows a May demand for a strategic reassessment from Southeastern Asset Management, which holds about 4% of shares. Authentic Brands Group reportedly expressed acquisition interest in early October at more than $20 per share, valuing the company at $6 billion or more. Mattel has not formally started a sale process or committed to any proposal. Toy maker Zuru is also reported to be considering a takeover offer.

Shareholders holding 76% of ABC's issued ordinary shares, including former CEO Warren Wheatley, are demanding a special meeting to appoint two new non-executive directors. WGW Capital, owned by a family trust whose beneficiaries include Warren Wheatley and his immediate family, is spearheading the shareholder demand. The ABC board acknowledged the demand as legally valid but expressed concerns about governance and regulatory integrity, without reflecting on the candidates' capabilities. Warren Wheatley received a 20-year debarment and R5 million fine from the FSCA over alleged share manipulation; three executives were collectively fined R9 million. The alleged manipulation involved artificially inflating Altvest's share price on the Cape Town Stock Exchange in September 2022. Wheatley maintains the trades involved 50 shares valued at R301.

Mike Repole announced on social media Thursday that he purchased one million shares of Churchill Downs Inc. The purchase gives Repole a stake of nearly 1.5%, and he said he may buy more. Based on Friday's closing price of $79.96 per share, the stake is valued at just under $80 million. Repole called for 'more education, real marketing, innovation, and evolution' and 'stronger leadership and greater accountability' in horse racing. Churchill Downs said it 'welcomes his significant investment' and Repole said he looks forward to working with CEO Bill Carstanjen and the board. The shares rose over 6% in Friday trading following the disclosure.

Oasis Management now owns 8% of Nidec (6594.T) and is urging the board to hire financial advisers to solicit nonbinding buyout proposals from strategic buyers and private equity firms. The move escalates pressure on Nidec's independent directors as the company recovers from an accounting scandal involving its car inverter business and subsidiaries in China, Italy, and Switzerland. The board's decision on hiring advisers is the next observable step for this 8% holder pressing for a sale process.

Erez Asset Management disclosed beneficial ownership of 10 million Class A common shares of Empire State Realty Trust (ESRT), representing 5.8% of that class, in a Schedule 13D filed October 5, 2026 with an October 1 reporting-trigger date. The Erez funds paid approximately $43 million in aggregate, including commissions, for the reported shares. Erez has communicated with management and the board regarding capital allocation, operations and strategy, including a potential strategic review of some or all assets. The shares rose 4.7% following the disclosure. The filing establishes engagement but does not announce a company-led strategic review.

Braemar Hotels & Resorts Inc. (BHR) will pay $25 million plus expenses to Al Shams Investments LTD (ASIL) to settle a proxy contest (Schedule 13D/A). ASIL withdrew its nomination of five director candidates and terminated its joint filing and solicitation agreement on October 6, 2026. ASIL retains a 9.48% stake of 6.5 million shares and may consult with the company's search firm regarding one director seat, though the board retains sole selection discretion. The agreement includes standstill restrictions, voting commitments, and mutual releases. The proxy contest ends with the activist group receiving a cash payment and consultation rights while remaining subject to standstill restrictions.

Stride, Inc. (LRN) entered into a cooperation agreement with Fivespan Partners, LP on October 8, 2026. Dylan Haggart will join the board effective October 30, 2026, or an earlier mutually agreed date. Dr. Steven Guttentag became a non-voting board observer immediately and will become a director following the 2026 Annual Meeting. The board approved a Capital Allocation Committee effective at Haggart's appointment, with three voting members and the CEO as a non-voting member, to support and recommend to the board on capital structure and allocation strategy. Fivespan withdrew its director nominations, stockholder proposal and Section 220 books-and-records demand and agreed to standstill and voting obligations. The agreement gives Fivespan board and committee representation without announcing a specific buyback or distribution.