The Morning Brief: Tepper’s Appaloosa Pressures TerraForm Power

Appaloosa Management’s David Tepper has turned up the heat on TerraForm Power. The Short Hills, New Jersey-based hedge fund manager raised his stake in the Bethesda, Maryland company to 9.50 percent and fired off a letter to CEO Brian Wuebbels once again questioning its plans to acquire the Vivint Solar portfolio of residential rooftop assets. Tepper also calls into question the arm’s length relationship between SunEdison and TerraForm, a SunEdison subsidiary that holds a portfolio of wind and solar assets.

“In the first place, the agreement was struck between an affiliated subsidiary and its controlling parent,” Tepper asserts. He also says the basic terms of the deal are not fair to TerraForm. “The Vivint transaction poses a serious threat to the Company’s prospects and should be vigorously resisted by you, as CEO, and the Governance and Conflicts Committee, as the unaffiliated shareholders’ advocate,” Tepper adds. The stock surged more than 7 percent on Tuesday, to close at $8.66.


Edward Lampert bought more than 300,000 shares of Sears Hometown and Outlet Stores for a little more than $7 per share in the open market. The stock closed Tuesday at $7.38, up 1.10 percent. The Hoffman Estates, Illinois-based retailer of home appliances, lawn and garden equipment, tools, and hardware was spun off by Sears Holdings in October 2012. The stock is down from its all-time high of $55.62 in May 2013. Lampert is the founder and manager of Bay Harbor Islands, Florida-based hedge fund firm ESL Investments.


Dallas-based Carlson Capital boosted its stake in Forestar Group to nearly 7 percent. In an amended 13D filing, the hedge fund firm, headed by Clint Carlson, says it acquired the shares for investment purposes and not to effect change or influence management. Carlson also uses boiler-plate language to stress that it has not worked with other investors but may from time to time hold discussions with management of the company, which specializes in real estate, oil and gas, and other natural resources.



UBS raised its price target on Keurig Green Mountain from $51 to $92 one day after the beverage company said it will be acquired by private equity firm JAB Holding Company for $92 per share. That’s a day and $41 late for most investors.