This content is from: Portfolio
The Morning Brief: Hedge Fund Favorite JD.com Surges in Price
Shares of hedge fund favorite JD.com surged about 4 percent on Tuesday, to close at $26.85, after investment banking firm Macquarie Group said it boosted its stake in the Chinese e-commerce giant by 6.9 percent. At the end of the third quarter, JD.com’s largest investor remained Beijing-based Hillhouse Capital Management, the largest Asian hedge fund firm with $20 billion under management. New York-based Tiger Global Management is the fourth-largest shareholder of JD.com, which is also the Tiger Seed’s most successful private investment. The stock is also Tiger Global’s fourth largest U.S. listed stock. Greenwich, Connecticut-based Tiger Cub Viking Global Investors is the sixth-largest shareholder. The stock is also the tenth-largest U.S. long of New York-based Tiger Cub Coatue Management.
Little-known activist hedge fund firm Clinton Group fired off a letter to the board of directors of First NBC Bank Holding Company urging the New Orleans financial institution to replace its current chief executive officer “as soon as practicable.” This was the second letter sent to the regional banking company by the New York hedge fund’s Scott Arnold in November alone.
“While I am sure that you are all working diligently to a resolution of the bank’s issues, the apparent inaction of the management and board and lack of publicly disclosed steps towards a brighter future has led me to contemplate the fitness of the current management and board for the task at hand,” he writes in the letter.
The troubled company needs to raise capital, and Arnold stresses First NBC Bank needs to aggressively restructure its balance sheet and business model. However, he asserts in the letter: “We are unsure that the current board, although whose members are all successful in their own rights and well-regarded members of the New Orleans business community, has the specific skills needed for the job ahead.”
He calls on the board to designate substitute nominees. If the company makes the recommended changes, the hedge fund believes the stock could be worth about 50 percent more than its current market capitalization of $130 million. Investors were apparently discouraged by the letter, as the stock plunged 5.6 percent on Tuesday, to $6.75.
Shares of hedge fund favorite Mallinckrodt Public Limited Company fell more than 9 percent on Tuesday, to $52.42, after the specialty drugmaker reported strong quarterly results but on a conference call offered gloomy guidance for its generic business. Among the top-ten holders are New York-based Paulson and Co. and Boston-based Adage Capital. The stock was Paulson’s sixth-largest U.S. long holding as of the end of the third quarter.