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The Morning Brief: Managers Dump Alibaba Just in Time
Score one for the hedgies: Several high-profile fund managers dumped their stakes in Alibaba in the fourth quarter, just in time to miss the Chinese e-commerce company’s double-digit decline this year. David Tepper’s Short Hills, New Jersey–based Appaloosa Management, Steven Cohen’s Stamford, Connecticut–based Point72 Asset Management, Eric Mindich’s New York–based Eton Park Capital Management and Leon Cooperman’s New York–based Omega Advisors were among the investors selling big blocks of Alibaba stock in the fourth quarter, according to a USA Today report.
Some 20 investors, including 19 hedge funds, exited their positions in Alibaba during the quarter, according to the report, which cited research from data provider FactSet. Alibaba, which raked in $25 billion in the biggest initial public offering in history last year, has slumped nearly 17 percent this year amid a disappointing quarterly report and revelations that a Chinese regulator is seeking information from the company about alleged sales of counterfeit merchandise.
Other hedge fund firms boosted their Alibaba stakes in the fourth quarter, according to the report. They include the New York firms Tiger Global Management and Och-Ziff Capital Management and Greenwich, Connecticut–based Tudor Investment Corp.
Weavering Capital founder Magnus Peterson plans to appeal his 13-year jail sentence for fraud, his lawyer told Bloomberg. Peterson was convicted in January of eight counts of fraud, forgery, false accounting and fraudulent trading related to the collapse of the London-based Weavering Macro Fund in 2009. The scheme cost investors approximately $536 million.
“Rarely, if ever, has there been a longer sentence for a fraud offense,” Michael Drury, a London-based criminal lawyer at BCL Burton Copeland, told Bloomberg. “Whether this marks a departure in the English courts to more U.S.-style sentencing remains to be seen but it does appear to send a signal that this type of crime will not be tolerated.” Matthew Frankland, Peterson’s attorney, will file the appeal this week, according to the report.
Wilmington, Delaware-based chemicals and life sciences giant DuPont hit back at dissident shareholder Nelson Peltz of Trian Fund Management, issuing a letter to shareholders that dismissed several of Trian’s complaints as “myths.” In the letter, released on Tuesday, DuPont rejected several of the activist firm’s claims, including that DuPont has $2-4 billion in excess corporate costs and that its recent strong stock performance only started after Trian became an investor. Last month Trian announced plans to launch a proxy fight with DuPont, planning to nominate four directors to the board. Trian has been calling on the company to break into three separate businesses.
DuPont also addressed its recent appointment of two new directors, neither of which are part of Peltz’s slate of four candidates. DuPont says that its management team tried to meet with Peltz but that the activist said he will not engage with the firm if he is not allowed to join the board, according to a New York Times DealBook report.