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The Morning Brief: Credit Suisse Sours on SunEdison
Talk about closing the barnyard door after the horses got out. On Friday Credit Suisse cut its rating on SunEdison from outperform to neutral and slashed its price target on the troubled solar energy company’s stock from $19 to $3. Thanks for the advice now that the stock is down to $1.41, having dropped another 30 percent over the past five trading days even as the overall market was staging a mini-rally.
In a note to clients, Credit Suisse cites “increased uncertainty” for the changes. On Thursday SunEdison announced it is selling its Malaysia silicon wafer production facility; closing its Pasadena, Texas polysilicon production facility; and restructuring its Portland, Oregon operations, among other moves. “Our changed view is not solely due to the announcements this week — but more about the passage of time and numerous developments over the last few months that have made us reconsider our conviction in our constructive stance,” Credit Suisse tells clients in its report.
Citadel’s Kenneth Griffin, who recently has been busy buying high-end, expensive real estate, has also been building an impressive art collection. The Chicago-based hedge fund founder plunked down about $500 million for Jackson Pollack’s “Number 17A” painting and Willem de Kooning’s “Interchanged,” according to the New York Times. Griffin, who purchased the two famous works of art from entertainment mogul David Geffen, has loaned them to the Art Institute of Chicago, where Griffin is a trustee, according to the report. Last year Griffin donated $40 million to the Museum of Modern Art in New York in what was described as one of the largest contributions the museum has received in its 85-year history.
Elliott Management Corp. cut its stake in The Interpublic Group of Companies to 4.8 percent. As a result, the New York hedge fund firm headed by Paul Singer no longer needs to file updates on its holdings unless it brings its stake back up to 5 percent or higher. In July, Elliott disclosed it owned 6.7 percent of the shares of the advertising holding company and said it was seeking “a constructive dialogue” with the board of directors about ways to boost shareholder value. The stock is up only slightly since that initial filing.
Interpublic recently reported fourth-quarter results that beat expectations and boosted its dividend by 25 percent. However, on a conference call with investors, chief executive Michael Roth reportedly expressed a little caution about 2016’s prospects due to macroeconomic challenges.
Ricky Sandler’s Eminence Capital disclosed it owned 5 percent of CalAtlantic Group as of February 9. The New York hedge fund firm indicated its position in the homebuilder, which has a $3.4 billion market capitalization, is passive.
Boston-based Adage Capital Partners disclosed that as of February 10 it owned a little more than 8.9 million shares of Ferroglobe, or 5.19 percent of the London-based producer and distributer of silicon metals and alloys.
In a separate filing, Adage said as of February 10 it owned more than four million shares of GCP Applied Technologies, or 5.74 percent of the total outstanding. Earlier this month the company began trading after its separation from W. R. Grace & Co. GCP is made up of Grace’s Construction Products business segment and Darex Packaging Technologies business.