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This Day in History — On this day in 1789, the United States Congress established the US Treasury Department. Bonus points if you can guess who was the first to lead the department (answer at the end).

Investor Spotlight— Michael Burry Goes Activist

The man who sent The Short Heard ‘Round The World is at it again, this time with his keyboard. Dr. Michael Burry, manager of Scion Asset Management, penned two activist letters last week. The recipients of such an honor? Gamestop (GME) and Tailored Brands (TLRD).

Burry has reason to publicize his frustrations with each business. GME and TLRD share similar characteristics in that:

• Both companies are bouncing around all-time lows.
• Both companies have high cash balances.
• Many investors consider both companies a value trap.

So what exactly is Burry demanding of management?

Burry’s Beef with TLRD

The famous hedge fund manager isn’t thrilled with TLRD’s capital allocation decisions and believes capital should be spent buying back stock. TLRD’s retired over $400M in debt with cash from operations, which Burry applauds, but doesn’t think its enough.

Burry wants management to institute a $50M buyback while continuing to pay down debt.

He also wants the company to stop their dividend — a commitment that’s cost the company nearly $36M per year.

If It Looks Like a Duck …

Burry seeks a more aggressive buyback from GME’s management team — to the tune of $238M. If Burry gets his way, management would retire close to 80% of GME’s outstanding stock. Management’s already said they’d purchase stock up to $6/share, so current prices of $4 still appear cheap.

Yet, even if Burry fails to get his way, GME’s released a hip new website! This will surely increased shareholder value, right?

Movers and Shakers — EEI Shareholders Get Paid & Hedgies Pile Into NTDO

Shareholders of Ecology & Environmental, Inc. (EEI) ended Wednesday with a nice little gift: a buyout agreement.

The company reached an agreement with Candian-based WSP Global, Inc., a private engineering firm. The deal still needs approval from EEI shareholders, but we think they’ll like the price.

If the deal goes through, WSP will acquire all outstanding shares of EEI for $15 a piece — a nice 50% premium from Tuesday’s close.

Hats off to Peter Rabover of Artko Capital LP for winning big on his long thesis.