Editor’s Note: Related tickers: Yahoo! Inc. (NASDAQ:YHOO), Herbalife Ltd. (NYSE:HLF), Google Inc (NASDAQ:GOOG), American Capital Mortgage Investment Crp (NASDAQ:MTGE), Dell Inc. (NASDAQ:DELL), Goldman Sachs Group, Inc. (NYSE:GS), Facebook Inc (NASDAQ:FB), Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Credit Suisse Group AG (NYSE:CS)
Dan Loeb’s profits on his two-year play on Yahoo! Inc. (NASDAQ:YHOO) reached $1.2 billion yesterday — one of the largest scores in Wall Street history on trades of a single company’s shares. Loeb had amassed a 73-million share block of Yahoo! Inc. (NASDAQ:YHOO) at an average price of $11.09 a share. In February, Third Point sold off 11 million shares for a total of $216.7 million — or an average of $19.70 a share. The deal with Yahoo! Inc. (NASDAQ:YHOO) yesterday will leave Third Point with 22 million shares. As part of the deal, each of the directors nominated by Third Point — Harry Wilson, Michael Wolf and Loeb — will step down on July 31. Yahoo! Inc. (NASDAQ:YHOO) shares were worth about $11 apiece when Loeb first waded into the company’s path — just about when it fired CEO Carol Bartz.
Carl Icahn Is Squeezing Bill Ackman To Death With Herbalife Trade (Forbes)
Last week, billionaire investor Carl Icahn sat on a stage at New York’s Pierre Hotel and was feeling so good about his bet on Herbalife Ltd. (NYSE:HLF) +6.43%that he almost sounded magnanimous towards his biggest Wall Street rival, the billionaire hedge fund manager William Ackman. “I like Ackman,” Icahn said. “Anybody that makes me a quarter billion dollars I like.” During his talk, televised on CNBC, Icahn carefully explained his approach to investing this year in Herbalife Ltd. (NYSE:HLF), the controversial nutritional supplements seller that Ackman has been vocally shorting in a massive way. Icahn and Ackman, of course, don’t like each other at all, but their big duel over Herbalife Ltd. (NYSE:HLF) has turned into a one-sided affair so far in 2013.
Pine River Picks REIT Winners in Renewed Housing Bets: Mortgages (BusinessWeek)
Pine River Capital Management LP, whose bets on U.S. home-loan bonds fueled the second-best hedge fund performance of last year, is picking winners and losers among the publicly traded companies that invest in the debt. The firm bought shares of mortgage real-estate investment trusts, including two run by ex-Freddie Mac portfolio chief Gary Kain, while wagering against others amid the industry’s worst quarterly slump since 2007, said Steve Kuhn, its fixed-income trading head. Pine River, which disclosed this month it quintupled its stake to 9.2 percent in Kain’s American Capital Mortgage Investment Crp (NASDAQ:MTGE), is investing based on its view of the skills of the managers and the value of their assets, he said.
SAC to Employees: Cohen Didn’t Read Dell Email at Heart of SEC’s Case (WSJ)
SAC Capital Advisors LP fired back at the U.S. government, telling employees Monday that the evidence shows Steven A. Cohen “did not even read” the email at the heart of allegations he failed to take proper steps to prevent insider trading at his hedge-fund firm. A 46-page “white paper” prepared by lawyers for Mr. Cohen responded point by point to the Securities and Exchange Commission’s civil-enforcement action Friday against Mr. Cohen. …The lawyers also took direct aim at the SEC’s assertion that Mr. Cohen got an email in August 2008 that reflected “the clear possibility” that information about upcoming Dell Inc. (NASDAQ:DELL) -0.91% earnings was improperly obtained.
As Banks Retreat, Hedge Funds Smell Profit (WSJ)
School Specialty Inc., a distributor of classroom supplies, borrowed $64 million from a private investment fund last year after it couldn’t get a loan from a bank. Its financial problems persisted, and, in January, it sought bankruptcy protection. Most of the company’s creditors lost money and its shareholders were wiped out. But its last-ditch lender, Bayside Capital, had its loan repaid in full, plus 12.5% interest. It also stands to collect a $23.7 million “early-payment” fee that would vault its profit above 30%, which has prompted a bankruptcy-court challenge by other creditors.
13 proves unlucky for hedgIes as 12-month winning streak ends (CityWire)
For the first time in a year all hedge fund strategies have fallen into red, research has shown. Across the board, hedge fund strategies returned -1.52% during June, with long/short strategies enduring the biggest monthly loss, Preqin, which analyses the performance of alternative asset classes, discovered. Returns for the quarter were also poor, the research house said, though this comes as little surprise given analyses conducted earlier in the year by Goldman Sachs Group, Inc. (NYSE:GS) and EDHEC-Risk Institute found that hedge fund managers had been caught out by short selling.
