Now this is what you call buyer’s remorse. It is bad enough that David Einhorn’s Greenlight Capital funds are down 13.8 percent for the year. However, for those who just plunked down new money late last year, it is even worse. Greenlight, which had been closed to new money since the first quarter of 2012, began accepting capital from existing investors on Nov. 1 and new clients on Dec. 1. Not good timing. The funds lost 1.9 percent in December, which means new investors who were excited to place money with Einhorn are now down close to 16 percent. So far, we are told there is no indication of a pickup in redemptions. The funds remain closed, however. Nothing like buying high, huh?
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Two investment accounts from Bermuda insurer Third Point Reinsurance Company that are managed by Daniel Loeb’s Third Point lost 5.1 percent in August. As a result, the portfolios are up a mere 0.2 percent for the year to date.
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Thomas Sandell’s Sandell Asset Management Corp. has disclosed its latest activist target. The New York hedge fund firm said in a regulatory filing it owns 5.1 percent of Viavi Solutions, formerly known as JDS Uniphase Corporation, which completed the spinoff of its Communications and Commercial Optical Product business segment on August 1. Sandell calls on the company to sell its two remaining businesses and turn what would become a shell company into a publicly-traded platform business, which could then acquire other profitable enterprises and benefit from Viavi’s tax advantages related to billions in accumulated losses. Sandell points out that the company has $4 billion to $4.5 billion of net operating losses.
Such a move could boost the stock by at least $10 per share, or nearly triple its current price, Sandell said. The stock Tuesday jumped 5.6 percent on the news to 5.67 per share. In the letter, Sandell also threatens to submit its own slate of directors at the company’s upcoming annual meeting. It also notes the hedge fund firm has been in settlement discussions and that it made its initial contact with the company back in October 2014. In August, Tom Waechter resigned as president and chief executive officer. At the end of the second quarter, Dallas-based Carlson Capital and New York-based Soros Fund Management also were among the top-ten holders.
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Robert Atchinson’s Adage Capital Management disclosed it owns 5.56 percent of Olin Corporation, which in March agreed to be acquired by Dow Chemical. In a 13D filing, the Boston hedge fund firm says it may speak with management, the board of directors and other shareholders and may take some sort of unspecified actions.
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Canadian Pacific Railway announced it has increased the size of its stock buyback program by 30 percent to nearly 12 million shares, or 8 percent of its public float. Since March 18, 2015, CP has repurchased nearly 9 million shares, or 6 percent of its float. The stock is one of about 18 held by William Ackman’s Pershing Square Capital Management. “We think it’s fair to assume that management remains confident that repurchasing its shares has the best return on capital deployed,” states Credit Suisse in a note to clients on Tuesday. Despite the announcement, shares of CP fell 3.24 percent, to close at $140.49.
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Badly battered hedge fund darling SunEdison was one of the bright spots in the market Tuesday, surging earlier in the day by 6 percent after Steven Cohen’s family office, Point72 Asset Management, disclosed late Monday it owned 5.1 percent of the shares. SunEdison’s stock closed up 3.46 percent at $10.76. However, the stock is still down more than 60 percent this quarter alone.
