Hedge Fund News Wrap: Week Ending 3/14/14

SAC Capital Reveals New Name

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Scandal-ridden hedge fund, SAC Capital Management, has announced a new name as it becomes a family office. The hedge fund decided to stay close to home with its branding, choosing the name “Point72 Asset Management,” which refers to SAC’s longtime, official headquarters at 72 Cummings Road in Stamford, Connecticut.

According to FINalternatives, the new name puts to rest allegations that SAC would leave its current headquarters as part of its downsizing plans. The office has nearly 100,000 square feet of space.

In a letter to employees, SAC President Tom Conheeney reflected on the significance of the new name, “It reminds us of a sense of continuity: Our headquarters has been at 72 Cummings Point Road for more than a decade, and we anticipate it will be our home for many years to come. Perhaps more important, the name emphasizes we point to a successful future.”

The new name will go into service on April 7th, and the new family office will manage founder Steven Cohen’s fortune, estimated at $9 billion.

 

See detailed coverage from:

FINalternatives

Bloomberg News

DealBook

 

 

FTC Investigates Herbalife Following Pressure from Ackman

For the past fifteen months, activist investor William Ackman has publicly called for a federal investigation of the nutritional supplement company, Herbalife. In his arguments, Ackman has contended that Herbalife is a pyramid scheme, and even made a $1 billion predication that the Federal Trade Commission would find his assertions true if they were to investigate the company.

This week, the news Ackman has been waiting for has finally arrived. On Wednesday, Herbalife disclosed it had received a civil investigative demand from the Federal Trade Commission. Herbalife management has continued to push a positive message, even as shares have fallen by 15 percent as the news was announced, according to DealBook.

Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC,” the company said in a statement. “We are confident that Herbalife is in compliance with all applicable laws and regulations. Herbalife is a financially strong and successful company.”

According to FINalternatives, the FTC investigation comes after Ackman’s intense lobbying efforts from last year, totaling $264,000. His efforts yielded the support of Senator Edward Markey (D-Mass.) and other groups. However, Herbalife, which counts George Soros and Carl Icahn among its major investors, shut down Ackman’s lobbying efforts with a $2 million “lobbying blitz.”

 

See detailed coverage from:

FINalternatives

Forbes 

DealBook

 

 

 

Hedge Fund, Pershing Square Capital, Loses $300M on Fannie, Freddie Bets

Although activist investor, William Ackman, saw a step towards victory with the FTC’s probe into Herbalife, another battle has emerged for his Pershing Square Capital hedge fund.

Pershing Square Capital saw a $300 million paper loss after shares for mortgage giants, Fannie Mae and Freddie Mac, tumbled 31 percent ($4.03) and 27 percent ($4.04), respectively. The shares plummeted after Senators Tim Johnson (D-South Dakota) and Mike Crapo (R-Idaho) revealed plans to unwind both of the mortgage giants and replace them with a new federally-insured mortgage securities.

Pershing Square, which owns about 10 percent of each company’s common shares, bet that efforts in Washington would result in massive returns from the two mortgage entities. According to the Wall Street Journal, “Pershing Square is still up on its bets, having spent about $2.29 per Fannie share and $2.14 per Freddie share.”

 

See detailed coverage from:

The Wall Street Journal

FINalternatives

Forbes

 

 

Icahn to Use Facebook for Activism

Billionaire activist investor, Carl Icahn, has become fond of social media. In particular, the investor has taken a liking to Facebook.

In a regulatory filing to the Securities and Exchange Commission, Icahn wrote that he plans to use Facebook as a platform for his investment campaigns. Icahn wrote that he may post material non-public information on his page, as well as on Twitter and on the Shareholders’ Square Table website.

Icahn, who has more than 150,000 followers on Twitter, has already reached 5,000 “likes” on Facebook.

Last year, the SEC stated that companies could use social media to disclose information, as long as they specified which network they would use.

 

See detailed coverage from:

FINalternatives

DealBook

The Wall Street Journal