Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Seeking Alpha – In a 13D filing with the SEC, Harbinger Capital Partners has revealed a new position in Zapata Corporation due to activity on June 17th, 2009. This is a brand new position for the hedge fund and it now shows a 51.3% ownership stake with 9,888,684 shares.
As defined in the 13D, Harbinger has, "Acquired beneficial ownership as a result of receiving certain proxies to vote the Shares. Until the Closing (as defined in Item 6), the Funds will not acquire a pecuniary interest in any of the Shares."
Seeking Alpha – In a 13G filing made with the SEC due to activity on June 9th, 2009, Lone Pine Capital has disclosed a 7.7% ownership stake in Smithfield Foods (SFD). This is a brand new position for Stephen Mandel’s hedge fund and it now owns 11,116,850 shares. Lone Pine previously did not show a position in SFD when we looked at its entire portfolio, so it has just recently entered the position over the past 2 months or so. In terms of other big bets Lone Pine has made recently, we saw that Mandel likes Strayer Education. He presented this choice at the 2009 Ira Sohn Conference where numerous hedge fund managers each presented an investment idea.
His $7 Billion fund has returned over 25% annually since its inception in 1997, but had a rough year in 2008. The term ‘lone pine’ comes from Mandel’s days at Dartmouth College, where the school has a historical lone pine tree. He is well versed in the ways of finding undervalued companies and he typically likes to sniff out solid companies with good management that are trading below their intrinsic value. In Alpha’s 2009 hedge fund rankings list, Lone Pine was ranked 21st.
Detroit News – President Barack Obama is ready to roll out an overhaul of the intricate rules and systems that govern America’s troubled financial institutions, proposing the most ambitious revision since the Great Depression.
The goal is to prevent a recurrence of the economic crisis that erupted in the United States and exploded last fall with devastating consequences still reverberating around the world.
Unlike the government’s temporary ownership stake in automakers and major financial companies, the regulatory changes set to be announced Wednesday are designed to be permanent. They could result in a major realignment of power and authority among government agencies that set the rules for banking, lending and investing and touch American lives through daily transactions, from credit cards to mortgages and mutual funds.
Seeking Alpha – While John Paulson’s position in AngloGold Ashanti (AU) is no secret, his hedge fund has just filed a 13G with the SEC with regard to the position. Paulson & Co has disclosed a 12.1% ownership stake in AngloGold Ashanti due to activity on May 20th, 2009, with the bulk of the position in his Advantage Plus fund. They now show holdings of 42,849,801 shares of AU. We covered their initial purchase on March 23rd when Paulson & Co took a large position in AngloGold at $32 a share.
This is just one of the many gold miners that Paulson’s hedge fund now has a stake in. He additionally likes the Gold Miners ETF (GDX), Gold Fields (GFI), and Kinross Gold (KGC). When we just last week looked at Paulson’s entire portfolio, we noted his massive stake in the precious metal Gold, bought through ticker GLD.
Bloomberg – Chrysler LLC, needing lender concessions by March 31, isn’t negotiating with its banks because it can’t persuade them to discuss trading loans for uncertain equity, people familiar with the companies’ actions say.
Chrysler must reduce its debt by $5 billion by getting creditors such as JPMorgan Chase & Co. to trade debt for an ownership stake or by changing loan terms in order to be viable, the Auburn Hills, Michigan-based automaker said on Feb. 17 in a plan submitted to the U.S. Treasury.
Banks have little incentive to trade their loans, and the only other creditors Chrysler lists that could take more equity for debt are the U.S. government and the United Auto Workers union, which already has agreed in principle to reduce its obligation by 50 percent.
“It’s going to be a tough sell to get the banks to give up their position for worthless equity,” said Don Workman, a bankruptcy attorney at Baker & Hostetler LLP in Washington. “The best Chrysler can hope is that the government is going to force them to do it.”
The banks, which include Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and JPMorgan, would be first to be repaid in the case of a bankruptcy. By taking equity in exchange for debt, the banks would lose that standing they now have. The caveat is that each of the banks has taken U.S. government aid from the Troubled Asset Relief Program and may be subject to Treasury’s influence, Workman said.
Bizjournals.com – After watching Sonesta International Hotels Corp. lose roughly 70 percent of its stock market value over the past 18 months, a Connecticut hedge fund has shed roughly a third of its holdings in the Massachusetts-based hotel operator.
In a recent regulatory filing, Mercury Real Estate Advisors, based in Greenwich, Conn., said it sold around 23,400 shares of Sonesta stock (Nasdaq: SNSTA) between Jan. 20 and Feb. 10, bringing its total ownership in the company to 206,048 shares. Those holdings equate to around 5.6 percent of Sonesta’s common stock outstanding.
Mercury’s ownership stake was more than 9 percent in mid 2007, when Sonesta’s stock traded above $30 a share. Sonesta’s stock opened Monday at $9.50 a share.
Wall Street Journal- A federal judge said the Securities and Exchange Commission didn’t prove that former Knight Equity Markets chief Kenneth Pasternak defrauded the firm’s clients.
In an oral opinion Thursday, U.S. District Court Judge Joel Pisano said that witness testimony, including testimony by former customers of Knight, and trade records "undermined" the SEC’s theory of the case. "I conclude there is no evidence of any misconduct committed by Mr. Pasternak," the judge said after a 14-day bench trial in federal court in Trenton, N.J.
