Thank you Congress. This is what shareholders of SunEdison and its competitors are saying after Congress agreed to extend the federal tax credit for installing solar energy systems and related products. The 30 percent credit would remain through 2019 and phase down through 2022. Shares of SunEdison, recently the worst-performing stock this year, surged more than 25 percent on Wednesday alone, to close at $6.21. The stock is now up about 115 percent since it bottomed on November 20. Even so, the stock has only returned to its price on November 10. It is still off about 80 percent from its high over the summer.
At least one investor who is no doubt relieved is New York-based Greenlight Capital, which was the second-largest shareholder at the end of the third quarter. New York-based Valinor Management, headed by David Gallo, was the fourth-largest investor, while Larry Robbins’ New York-based Glenview Capital Management was the seventh-largest investor.
On the other hand, by the end of the third quarter, a number of high-profile hedge funds sold huge stakes in the stock, including New York-based Third Point; Greenwich, Connecticut-based Lone Pine Capital; New York-based York Capital Management; and Chicago-based Balyasny Asset Management.
Shares of Solar City, meanwhile, surged more than 34 percent. Its third-largest investor at the end of the third quarter was Los Angeles-based Canyon Capital Advisors, while the fifth-largest shareholder was San Francisco-based Passport Capital.
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Elliott Management upped its stake in American Capital, from 9.1 percent to 10.3 percent of the Bethesda, Maryland investment firm.
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Jeffrey Smith’s Starboard Value cut its stake in Office Depot to 5.5 percent. The New York activist firm disclosed the sale a week after the Federal Trade Commission filed a lawsuit intended to block the merger between the Boca Raton, Florida office products retailer and its rival, Framingham, Massachusetts-based Staples. Even so, shares of Office Depot rose 1.22 percent on Wednesday, to $5.79.
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William Ackman tells clients 2015 will likely be the worst year ever for his New York-based Pershing Square Capital Management. The firm’s main activist funds are down 23.7 percent through December 8. This is roughly double the loss they posted in 2008 during the financial crisis, when they between 12 percent and 13 percent. Despite the losses, Ackman says redemptions were “nominal,” amounting to just $39 million, or a mere 0.2 percent of total capital.
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Shares of hedge fund favorite Apple rose 0.77 percent Wednesday, to $111.34, even though UBS cut its price target by $10 to $130. The investment bank tells clients in a note it estimates December shipments for the iPhone will be lower than they were November. It also said it overestimated sales in the September quarter and reduced its estimate for the March quarter. The upshot: full year phones shipments “are now flattish.” As a result, UBS says the near term “looks more challenging.” ___
The hedge fund industry generated an aggregate loss of 0.26 percent in November, extending its loss for the year to 1.21 percent, according to eVestment. As a result, the industry could post its first annual loss since 2011, when average returns were a negative 4.99 percent.
