The Morning Brief: Icahn Bails Out of Take Two, Takes Hit on Nuance

Carl Icahn has bailed out of his position in Take Two Interactive Software, selling all of his 12 million or so shares back to the company for $16.93 per share, or a total of $203.5 million. In addition, Brett Icahn, James Nelson and SungHwan Cho resigned from the company’s board of directors. In response, the stock dropped 5.50 percent, to $16, on Tuesday. Market watchers believe that the company, best known for its Grand Theft Auto game, is less likely to be acquired now that the septuagenarian activist is out of the stock. Shares of the video game software maker peaked at $19.10 in late August.

Meanwhile, shares of another big Icahn holding, Nuance, tumbled more than 18 percent Tuesday to $13.10 on nearly 13 times the average daily trading volume. The stock is now down 44 percent in less than seven months. According to reports, the voice and language technology company forecast earnings and revenues for 2014 that were below Wall Street expectations. Wedbush Securities downgraded the shares to Neutral from Outperform, while other brokerages cut the target price to somewhere between $12 and $14.

Paul Singer’s Elliott International has increased its stake in Celesio, a German company that distributes pharmaceuticals, to 25.16 percent of the voting rights. The thinking is that this puts the New York-based hedge fund, run by Singer’s firm Elliott Associates, in a better position to prevent McKesson from completing its planned $8.3 billion acquisition of the company. Elliott’s stake is closer to 21.05 percent if you assume two convertible bonds are fully converted.

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Credit Suisse raised its earnings estimates for each of the next three years for Third Point Reinsurance and raised its price target on the stock to $16 from $15. Most of its investable assets are managed by Daniel Loeb’s New York hedge fund firm Third Point, in its flagship hedge fund of the same name. The investment bank cited Third Point’s 1.1 percent performance in October and the revelation that the hedge fund firm manages $1.4 billion of the reinsurer’s assets, higher than the $1.1 billion previously reported. Credit Suisse also cited a more optimistic view of underwriting profitability.

Alan Howard’s BH Macro Ltd. has gained 1.12 percent this month through November 22. Even so, it is only up 2.05 percent for the year. BH Macro Ltd. is a Guernsey-based closed-ended investment company that invests substantially all of its assets in the Brevan Howard Master Fund Ltd, the large global macro hedge fund managed by investment firm Brevan Howard. In October, when the fund lost 0.59 percent, it said in its monthly report it suffered some small losses in equity macro trading, foreign exchange trading and in U.S. dollar interest rate trading. It said this was partially offset by small gains in credit and in European interest rate trading.

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