Billionaire Ken Griffin Ups Stake in Arch Coal Inc (ACI) to Over 5%

Ken Griffin and his fund, Citadel Advisors, have boosted their stake in Arch Coal Inc (NYSE:ACI), a new filing with the Security and Exchange Commission shows. The passive stake held by Citadel contains almost 11.6 million shares, which have an aggregate value of $47.6 million (current price of the stock), and are equal to 5.4% of the common stock. Previously, Citadel disclosed ownership of around 160,100 shares of Arch Coal, and  another 875,000 shares under options.

The stock of Arch Coal Inc (NYSE:ACI) is a volatile one, sporting a beta of around 1.9. It has been down by over 7% since the beginning of the year, and declined by almost 20% over the past year. For the previous year, Arch Coal posted a net loss of $1.08 per diluted share, which was significantly lower than the loss of $0.36 per share posted a year ago, although it was above the consensus estimate of -$1.25. For the current year, the company is expected to deliver a net loss of -$1.49 per share, and revenue of around $3.2 billion. Overall, on average, analysts appreciate the stock as a ‘Hold’, with the average target price of around $4.6 per share.

However, Arch Coal Inc (NYSE:ACI) is refocusing its strategy in order to increase its potential. The company divested its Canyon Fuel subsidiary for over $420 million in cash last year, and aside from the gain, it anticipates to save a significant amount of cash during the next couple of years, according to a statement.

In addition, recently Arch Coal Inc (NYSE:ACI) sold its Hazard subsidiary to Blackhawk Mining, LLC for $26.3 million in cash, the company stated in a press release. The complex includes mining site and infrastructure and 38 million tons of thermal coal reserves. Through the deal, Arch Coal managed to divest over $15 million of reclamation liabilities, and received the possibility for future royalty payments of up to $35 million.

At the same time, a look at the whole list of shareholders of Arch Coal Inc (NYSE:ACI), shows that aside from Ken Griffin, several other major hedge funds are bullish on the company. Israel Englander‘s Millennium Management has initiated a long stake in the company and currently holds around 1.1 million shares. Moreover, Millennium boosted the number of shares held under “call” by some 3,000%, also to some 1.1 million shares.

Disclosure: none

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