Hedge Fund News Wrap: Week Ending 3/28/14

Hedge Fund, Greenlight Capital, Identifies Anonymous Blogger

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Hedge fund manager, David Einhorn, now knows the identify of the anonymous blogger who had discussed one of his hedge fund’s stock positions before the information was publicly announced. As a result, Einhorn has dropped a lawsuit against the popular blogging site, Seeking Alpha.

According to Business Insider, only Greenlight employees, counsel, and prime brokers knew about the Micron stake that was mentioned in a blog post on Seeking Alpha in November 2013, by the anonymous blogger, “Valuable Insights.”

In a statement, Greenlight Capital stated that it “has resolved the matter privately to our satisfaction.”

Still, it is unclear how the identity of the anonymous blogger was obtained. Colin Lokey, Director of Contributor Success at Seeking Alpha, has stated that the website did not provide the hedge fund with the blogger’s identity.

Greenlight dropped the suit of its own accord. We did not at any time disclose the author’s identity formally or informally, and at no time were our actions dictated by reaching a deal with Greenlight,” said Lokey.

 

See detailed coverage from:

FINalternatives

Business Insider

DealBook

 

 

 

Pershing Square Capital Near “Break Even” on Herbalife Bet

According to Bloomberg News, Bill Ackman’s Pershing Square Capital is close to breaking even on its bet against the supplement giant, Herbalife Ltd. Last month, Ackman had called the trade his “biggest loser” since 2004. However, Herbalife stock has taken a plunge following a statement from the company, stating that the U.S. Federal Trade Commission is conducting an investigation.

The FTC investigation comes after Ackman’s intense lobbying efforts from last year, totaling $264,000. The hedge fund manager has argued that the supplement company operates as a pyramid scheme.

Herbalife shares have reached an eight-month low of $49.54, as of March 21st. Ackman bet $1 billion against the stock back in May 2012, when the company’s shares were traded at an average of $48.58.

Herbalife, which has continuously denied Ackman’s allegations, has won the support of activist investors such as Carl Icahn, and Post Holdings Inc.’s William Stiriz.

On Monday, the company disclosed that it would be adding three more employees from Icahn Enterprises on its board.

“The current Icahn representatives have brought considerable insight and experience to our board and we look forward to working with the additional representatives in a similarly collaborative way,” said Herbalife CEO Michael Johnson.

 

See detailed coverage from:

Bloomberg

FINalternatives

Yahoo! Finance

 

 

 

Hedge Fund Manager, Daniel Loeb, Files Suit Against Sotheby’s

Hedge fund manager, Daniel Loeb, has filed a lawsuit against Sotheby’s to remove its poison pill, which has prevented his hedge fund from buying more of the auction house’s shares.

As of now, Loeb’s Third Point LLC owns 9.6 percent of Sotheby’s shares. The poison pill limits activist investors from acquiring more than 10 percent of the company’s stock. According to the Wall Street Journal, passive investors who do not seek to change corporate policies can acquire bigger positions.

Sotheby’s has contended that the pill, which expires in October after one year, “is an important tool to ensure that all Sotheby’s shareholders are treated fairly.”

However, Dan Loeb has argued that the poison pill is, “an improper attempt by the directors of Sotheby’s to entrench themselves in office and to hinder Third Point’s or any other stockholder’s ability to run an effective proxy contest.”

According to the New York Times’ DealBook, Third Point hopes that the courts will rule that the poison pill is illegal, which would allow Loeb to buy more shares and make more demands over the board.

Last month, Loeb started a bitter proxy battle with the auction house. Loeb called for three seats on Sotheby’s board, which the auction house rejected, stating that the nominees added “no relevant expertise not already represented on the board of directors.” Dan Loeb had nominated himself as well.

See detailed coverage from:

DealBook

The Wall Street Journal

Financial Times

 

 

Barington Capital Group Wants Darden to Consider New CEO

Activist hedge fund, Barington Capital Group, has asked Darden Restaurants Inc. to consider finding a new chief executive officer, and also installing an independent chairman.

In a letter to Darden, Barington stated that it has “lost confidence” in current CEO, Clarence Otis.

Needles to say, the status quo at Darden is unacceptable,” stated Barington Founder, James Mitarotonda, in a letter to the company.

Barington is joined by activist investor, Starboard Value LP, who has been calling for Darden to spin off its estate holdings in a separate company. In addition, both Barington and Starboard have called for the separation of LongHorn Stakehouse, Red Lobster, and Olive Garden from the restaurant group giant.

In a statement, Darden did not respond to Barington’s criticism directly.

“As we have said previously, our focus is on doing what is in the best interest of all Darden shareholders and the board is confident in the actions the company is taking to deliver on this responsibility. We have been speaking directly with our shareholders and look forward to continuing that dialogue.”

 

See detailed coverage from:

FINalternatives

DealBook

The Wall Street Journal