Editor’s Note: Related tickers: Sony Corporation (ADR) (NYSE:SNE), Herbalife Ltd. (NYSE:HLF), News Corp (NASDAQ:NWS), The Boeing Company (NYSE:BA), American International Group, Inc. (NYSE:AIG), Detour Gold Corporation (TSE:DGC), Firsthand Technology Value Fund Inc (NASDAQ:SVVC), Facebook Inc (NASDAQ:FB), Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), Berkshire Hathaway Inc. (NYSE:BRK.A), H.J. Heinz Company (NYSE:HNZ), Morgan Stanley (NYSE:MS), Citigroup Inc (NYSE:C), Goldman Sachs Group, Inc. (NYSE:GS), LyondellBasell Industries NV (NYSE:LYB)
The Tiger Cubs went rogue in the first quarter. This closely followed group of hedge fund managers, who spent part of their careers working at Julian Robertson Jr.’s Tiger Management Corp., frequently piles into several of the same stocks. Often, these stocks are among the Cubs’ top holdings. Not in the first quarter, however. While in previous periods it was not uncommon to find a half dozen of the same stocks among the top five holdings of the Cubs, this was not the case in the quarter ended in March. Rather, the largest holdings are mostly an eclectic mix of stocks, clearly indicating that this time around most Tiger Cubs ignored what the others were doing.
Sony Board Considers Breakup (NYTimes)
Sony Corporation (ADR) (NYSE:SNE) said on Wednesday that its board was considering a proposal from a United States hedge fund to spin off part of its entertainment business, but it stressed that those discussions were preliminary and that it had not set a timetable for a response. Sony Corporation (ADR) (NYSE:SNE), under pressure from the hedge fund Third Point, one of its top investors, to unlock more value from its lucrative entertainment divisions, also said it was on track to bring its money-losing electronics business back into the black this year. …Corporations in Japan, including Sony Corporation (ADR) (NYSE:SNE), have a history of ignoring letters from shareholders calling for similar overhauls, according to a former top investor in Sony Corporation (ADR) (NYSE:SNE).
Carl Icahn And Herbalife Are Crushing Bill Ackman (Forbes)
For five months, billionaire hedge fund investor William Ackman has been conducting a high-profile short promotion against Herbalife Ltd. (NYSE:HLF), calling the nutritional supplements seller a pyramid scheme and betting heavily that its stock would fall. As recently as Monday, Ackman’s public relations machine was email blasting a Hispanic Federation letter urging the Federal Trade Commission to conduct an investigation into Herbalife Ltd. (NYSE:HLF)’s alleged targeting of Latinos. But this week shares of Herbalife Ltd. (NYSE:HLF) +2.7%have moved sharply against Ackman and his Pershing Square Capital Management hedge funds. The stock rose about 2% in heavy Tuesday morning trading in New York, crossing the symbolic $50 mark. It jumped again shortly after noon, putting the stock up 2.7% on the day, after Herbalife Ltd. (NYSE:HLF) announced it had successfully hired PricewaterhouseCoopers as its new auditor. Shares of Herbalife Ltd. (NYSE:HLF) soared by more than 10% on Monday and are now up 53% in 2013.
Top 50 Hedge Funds Ditch News Corp for Boeing (CNBC)
The world’s largest hedge funds have bolstered their equity holding so far this year, increasing their exposure by over 5 percent and adding more to The Boeing Company (NYSE:BA) than any other stock, according to financial research firm FactSet. The top 50 hedge fund managers also made significant reductions to their stake in News Corp (NASDAQ:NWS), Factset said. They reduced their holding by 20.3 percent in the stock, which also represented the largest individual equity sale in three of the funds. Managers took profits in the media giant as the stock, which has been a strong performer this year, returned over 30 percent year-to-date.The funds also cut their holdings in insurer American International Group, Inc. (NYSE:AIG) by 16.2 percent.
U.S. may use RICO law against SAC Capital Advisors (DenverPost)
Federal prosecutors in the insider-trading investigation of SAC Capital Advisors LP are contemplating charging the hedge-fund company as a criminal enterprise, using a powerful legal tool employed against the Mafia and drug gangs, according to people familiar with the probe. No hedge fund has ever been charged under the Racketeer Influenced and Corrupt Organizations Act, or RICO, legal observers said. The potential strategy, reported earlier by Fox Business Network, has been considered as prosecutors and the FBI face a five-year legal deadline in July to bring securities-fraud charges in an investigation that touches SAC’s billionaire founder, Steven A. Cohen.
Detour Gold Raises $149 Million in Share Sale to Help Fund Mine (ResourceIntelligence)
Detour Gold Corporation (TSE:DGC), a producer of the metal backed by hedge-fund manager John Paulson, raised C$153 million ($149 million) to help fund its mine in northern Ontario. Underwriters led by BMO Capital Markets agreed to buy 17.5 million shares at C$8.75 apiece, the Toronto-based company said today in a statement. The transaction is a so-called bought deal, in which the underwriters initially buy all the stock being offered. The underwriters for the BMO deal have an over-allotment option to buy as many as 2.63 million shares to raise an additional C$23 million.
Amaranth Hit Death Spiral as Sycophants, Fools Cavorted: Books (BusinessWeek)
In September 2006, Greenwich, Connecticut-based hedge fund Amaranth Advisors LLC collapsed after losing more than $6 billion in the natural-gas futures market. In “Hedge Hogs,” Barbara T. Dreyfuss tells the story of the math-whiz traders whose risky dance with deregulation led to the collapse. The star of Dreyfuss’s distressing tale is Brian Hunter, the Amaranth celebrity described by sycophants at the now-defunct Trader Monthly magazine as a top dog among a crop of “red-hot traders.”
Hedge fund boss gets 6 1/2 years in insider case (Wane)
The co-founder of a Connecticut hedge fund who authorities said made his firm nearly $70 million in illegal profit through insider trading was sentenced Monday to 6 1/2 years in prison. Anthony Chiasson, 39, of Manhattan, had been convicted in December of five counts of securities fraud and one count of conspiracy to commit securities fraud. U.S. District Judge Richard Sullivan also ordered him to pay a $5 million fine. Prosecutors said Chiasson was part of a group of portfolio managers and analysts who got inside information from employees at publicly traded companies.
Star Tech Investor Kevin Landis in Fight for His Job (WSJ)
A one-time technology investing star world is facing a fight to continue running his investment fund. Kevin Landis, the founder and portfolio manager of the Firsthand Technology Value Fund Inc (NASDAQ:SVVC) +0.10%, ran the best-performing mutual fund in the U.S. over the five-year period during the Internet boom. A year ago, he was in demand after snapping up private shares of Facebook Inc (NASDAQ:FB) -0.39% In both cases, his funds eventually endured subsequent slides. Now he has an activist attempting to toss him out of his publicly-traded closed-end fund. Bulldog Investors, a hedge fund run by Phillip Goldstein that operates in the world of closed-end funds, bought a 9.67% stake and launched a campaign targeting Landis in April. Closed-end funds trade like stocks on an exchange.
Moore Capital Adds Mid-Market Lending Firm, Pledges $200M (Finalternatives)
Moore Capital Management is getting into the mid-market lending business. The hedge fund has committed approximately $200 million to the former Cyan Partners, which has been renamed MC Credit—after the hedge fund—and which will operate as an independent affiliate of Moore, Buyouts magazine reports. Cyan became MC this month, and hopes to raise $750 million for a lower mid-market debt fund. Cyan, which was founded by Morgan Stanley (NYSE:MS) and Citigroup Inc (NYSE:C) leveraged finance veteran Ashok Nayyar in 2008, has sourced and invested in some $900 million in credit since its debut.
Google Is The New Hedge Fund Hotel, Boeing The Market Darling, And Apple’s Looking Rotten (Forbes)
The 50 largest hedge funds in the world decided to sell Apple Inc. (NASDAQ:AAPL) -0.74% in the first quarter, replacing it with The Boeing Company (NYSE:BA) +0.03% and, interestingly, Norwegian Cruise Holdings which went public in January, according to a report by FactSet. The group of hedge fund heavyweights, which includes the likes of Carl Icahn, David Einhorn, and Dan Loeb, bet on consumer discretionary, which appeared as the most overweight sector, while LyondellBasell Industries NV (NYSE:LYB) was the most overweight equity, compared to its weights in the S&P 500. They shunned the IT sector, and particularly Apple Inc. (NASDAQ:AAPL), which still remains the sixth largest holding by dollar-value. The hedge fund hotel: Google Inc (NASDAQ:GOOG) -0.2%, held by 62% of the 50 largest hedge funds. It was a first big quarter this year. After a rally that started in mid-November around President Obama’s reelection, stocks took off and haven’t stopped since, with the S&P 500 and the Dow continuing to break records and the Nasdaq returning to its post-dotcom-bubble levels.
Gupta Challenges U.S. Wiretaps in Appeal (WSJ)
Rajat Gupta was convicted on insider-trading charges in part due to phone records that showed he finished a conference call with the board of Goldman Sachs Group, Inc. (NYSE:GS) and called a friend who was a hedge-fund manager, who moments later placed a profitable trade on Goldman Sachs Group, Inc. (NYSE:GS) stock. His lawyer argued Tuesday it was merely a coincidence. Mr. Gupta, in a bid to stay out of prison, is trying to convince a federal appeals court to set aside his conviction or at least grant him a new trial. His lawyers say the trial judge was wrong to allow wiretaps of Raj …
Buffett, With His Magic Touch, May Be Irreplaceable (NYTimes)
Acquisitions usually come with a nice premium for the seller. But when Warren E. Buffett is the buyer, there is typically something of a discount. The ability to make acquisitions on favorable terms is a testament to Mr. Buffett’s personality and skills as a deal maker. It also highlights an almost unsolvable problem for his company, Berkshire Hathaway Inc. (NYSE:BRK.A), and its shareholders. When its 82-year-old chief executive is gone, who will negotiate such sweet deals? A case in point is the $28 billion buyout of the H.J. Heinz Company (NYSE:HNZ) by Berkshire Hathaway Inc. (NYSE:BRK.A) and a partner, the investment firm 3G Capital. The deal, announced in February, is expected to be completed by the end of the summer.
