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Investor Ups Gateway Stake

An investor group has taken a 10.2% stake in Gateway Inc. and sent a letter to the computer maker, offering “assistance” with improving the troubled company.

The group is led by Harbinger Capital Partners Master Fund I Ltd., a Cayman Islands-based fund that’s affiliated with Birmingham, Ala.-based Harbert Management Corp.

Harbinger, which had a 6.6% stake in Gateway last month, has garnered headlines for its activist roles at other companies.

In a Securities and Exchange Commission filing, Harbinger said it sent a letter to Rick Snyder, Gateway’s chairman and interim chief executive, offering the board and management “assistance in their efforts to enhance shareholder value.”

The letter wasn’t big on details, but said, “The motivation for our investment in Gateway can be distilled to one simple thesis; there is nothing wrong with Gateway that can’t be fixed with what’s right with Gateway.”

“We believe that the firm’s brand equity, heritage of innovation, and retail channel strength, position the firm to be a leader in the evolution toward design-driven, user-friendly, media facile PCs,” Harbinger wrote in the letter.

Gateway has struggled to turn a profit in the face of growing foreign competition and from the two biggest players in the industry: Hewlett-Packard Co. and Dell Inc.

The company doesn’t have a permanent chief executive. Snyder stepped in as interim chief earlier this year when Gateway’s former top executive, Wayne Inouye, left.

Inouye boosted Gateway’s retail sales but didn’t produce as much growth in the company’s business selling directly to consumers, companies and governments.

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