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Will Steve Jobs’s Resignation Take a Bite out of Hedge Fund Managers?
Steve Jobs’s announcement that he is stepping down as CEO of Apple casts doubt over the future of the company he co-founded and creates concern for its shareholders.
All investor eyes are on the shares of Apple after Steve Jobss announcement that he is stepping down as CEO of the computer and consumer electronics giant he co-founded. The 56-year-old Jobs, of course, is the visionary behind Apples enormously successful iPod, iPhone and iPad franchises, and investors are understandably concerned about how the company will fare without him.
One group with a keen interest in how the stock reacts to Jobss departure is hedge funds. Although Apple did not rank among the 15 stocks most overweighted by hedge funds at the end of the second quarter, according to an analysis by Credit Suisse Securities, it is perhaps the most widely held stock among these investors.
According to one estimate, more than 300 hedge funds have some sort of position in the shares. More than two dozen high-profile hedge funds alone count Apple as their No. 1 holding, including a large number of so-called Tiger Cubs and related felines.
Among them: Julian Robertson Jr.s Tiger Management Corp. itself, as well as Stephen Mandel Jr.s Lone Pine Capital, his buddy John Griffins Blue Ridge Capital, Lee Ainslies Maverick Capital, Robert Citrones Discovery Capital Management, Philippe Laffonts Coatue Management and Patrick McCormacks Tiger Consumer Management. In addition, Chase Colemans Tiger Global Management counted Apple as its second-largest holding.
Some of the biggest hedge funds without previous ties to Robertson and Tiger also singled out Apple as their top holding. They include James Simons Renaissance Technologies, Steven Cohens SAC Capital Advisors, Kenneth Griffins Citadel, David Shaws D.E. Shaw & Co., Mark Kingdons Kingdon Capital Management, Jeffrey Altmans Owl Creek Asset Management and Jeffrey Viniks Vinik Asset Management.
In addition, David Einhorns Greenlight Capital cited Apple as its second-largest holding.
Although Apple is just one among many holdings for most of these hedge fund managers, dont underestimate its potential impact. In July alone shares of Apple surged more than 16 percent thanks to astounding quarterly results reported during the month. (Einhorn said Greenlights strong July performance was led by Apple and gold.) Afterward several analysts raised their price targets on the stock. The stock, however, was down nearly 7 percent from its high before Jobs announced his resignation.
The big question is whether these savvy hedge fund managers keep their stakes intact, begin to trim their positions, dump the stock altogether or buy on likely dips. One thing is certain: Apples performance will have a major impact on the fortunes of many of the most successful hedge funds.