The Morning Brief: Third Point Falters in June; Groupon Gains Boost Hedge Funds
Dan Loeb’s Third Point Offshore Investors Limited has fallen by 2.2 percent through June 12, lowering its gains for the year to 16.1 percent, according to a shareholder report. It does not say what accounted for the loss. And for the first time, Third Point’s most recent monthly report did not identify its top long positions. However, Loeb did say earlier this year that he joined the growing group of investors who went long the Japanese stock market and short the Japanese yen, a trade that worked great for the past few months but abruptly changed directions a few weeks ago. “We believe there is still value in our initial currency/index trade reflecting this important structural inflection point and also have taken selected positions in single-name stocks that we believe will benefit from this policy,” Loeb wrote in his first quarter letter, dated April 10.
Meanwhile, Loeb has stepped up support for charter schools and his simultaneous assault on teacher’s unions. Last month he donated an additional $1 million to charter schools as a way to flip the bird at American Federation of Teachers President Randi Weingarten, according to a new report. You may recall back in April the AFT published a seven-page manifesto criticizing hedge funds and other investment professionals who have contributed to or sit on the governing board of an organization that advocates for the replacement of defined benefit plans with defined contribution or cash-balance plans. It singled out 33 firms on a so-called Investment Manager Watch List for their involvement with organizations such as StudentsFirstNY. The list includes five hedge fund managers featured on the Institutional Investor’s Alpha Rich List, which ranks the top-earning hedge fund managers globally for 2012. These managers are David Tepper of Appaloosa Management, Paul Singer of Elliott Management, Steven Cohen of SAC Capital Advisors, Paul Tudor Jones II of Tudor Investment Corp., and, of course, Loeb of Third Point.
Several hedge funds were big winners after shares of Groupon surged 11 percent, to $7.62, on Friday. That’s when Deutsche Bank raised its rating on the stock to Buy from Hold and lifted its price target from $6 to $10. The bank is confident the internet marketer of discount goods and services will benefit from new markets and delivery strategies. The biggest beneficiary Friday was Tiger Global, which at the end of the first quarter owned 65 million shares, or 9.86 percent of the total outstanding. Barry Rosenstein’s Jana Partners is the fourth largest holder with 3.33 percent of the shares.
Meanwhile, Herbalife’s stocks seems like it is popping nutrition supplements. The stock surged another 3 percent on Friday, on an otherwise down day for the overall stock market, and is now up nearly 50 percent this year alone.