The Morning Brief: Hedge Fund Pick SunEdison Sinks 40 Percent

An old favorite hedge fund stock took another huge beating on Thursday on another nightmare day for the global stock markets. Shares of embattled renewable energy company SunEdison closed down nearly 40 percent, to $3.34. At one point trading was temporarily halted due to a circuit breaker.

Jittery investors may have been very unhappy with the company’s announcement, issued before the market opened, of a major debt restructuring designed to reduce debt by $738 million. Under the deal, the company plans to raise $725 million in second-lien secured-term loans. It also will issue 11.8 million shares of common stock in exchange for $158.3 million of preferred stock. The company also said it will issue warrants exercisable for nearly 29 million shares of common stock.

Around mid-December, Boston-based Adage Capital Management more than doubled its stake in the company, to 17 million shares, or 5.37 percent of the total outstanding, making Adage Sun Edison’s sixth-largest shareholder. After the purchase, five hedge fund firms owned more than 23 percent of the company’s shares. They include Adage and four New York-based firms: Greenlight Capital, Valinor Management, SRS Investment Management and Glenview Capital Management. Of course, this assumes the other four firms did not sell any shares in the fourth quarter.


More bad news for Einhorn’s Greenlight, as if he needed any more. On Thursday, Barclays cut its price target on Consol Energy from $10 to $8 after the coal and natural gas company warned it is cutting its capital expenditures and coal shipments due to low energy prices. Barclays, which maintained its equal weight rating on the stock, also trimmed its cash flow estimates for the fourth quarter of 2015 and all of 2016 and 2017.

“We and the rest of the market keep trying to realistically calibrate our commodity expectations, but the sought-after ‘floor’ has remained out of reach,” the bank concedes in a note to clients. Shares of Consol fell more than 76 percent last year. Even so, the stock remained among the New York hedge fund’s largest long positions entering 2016. On Thursday, the stock dropped more than 4 percent, to $7.26, nearly double the overall market’s decline for the day.


Tim Garry, described as the number two person at San Francisco-based Passport Capital, is leaving the $4.4 billion hedge fund firm, according to a Reuters report. Garry, who has been with the firm since December 2007, is also credited with helping to boost Passport’s risk management and quantitative strategy, according to the report. “Given his achievements at Passport, Tim is ready for a role with an increased level of responsibility and will be pursuing new opportunities,” Passport founder John Burbank reportedly told clients in a letter. “We look forward to supporting Tim in his future endeavors and appreciate his many valuable contributions to Passport.”


Daniel Benton’s technology-focused Andor Capital Management posted a 1.7 percent gain in December, bringing it up about 1 percent for the year, according to an individual who has seen the results.


The Visium Global Fund gained 10.3 percent last year. Managed by Jacob Gottlieb’s New York-based Visium Asset Management, the long-short fund invests more than 90 percent of its assets in equities.