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The Morning Brief: SAC's Cooperation with the Government is "No Longer Unconditional"

Steven Cohen’s SAC Capital Advisors said its cooperation with the U.S. government investigators is “no longer unconditional.” The hedge fund told investors in a letter, "While we have in the past told you of our cooperation with the government's investigation, our cooperation is no longer unconditional," according to the Wall Street Journal. SAC also said that while it tried to be transparent to investors in the past regarding government investigations, going forward it will provide limited updates. "The need for confidentiality will limit our ability to share with you details about how the investigation is progressing," SAC wrote.

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It only gets worse for J.C. Penney. Shares of the reeling retailer slumped more than 3 percent on Friday after the company reported a wider loss on lower-than-expected revenues in the first quarter. Investors also may have been disheartened to learn that shareholders on Friday astoundingly re-elected all 11 of J.C. Penney’s directors to the company’s board at its annual meeting.

On Friday, Deutsche Bank lifted its price target on the stock from $17 to $18, saying it is “incrementally more positive” on its near-term prospects after the company’s earnings call with investors. “By bringing back popular private brands and increasing the promotional intensity around holidays, we believe CEO (Myron) Ullman will make substantial progress improving JCP’s traffic and margins over time,” the bank told clients in a research note.


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Pershing Square’s William Ackman, who recently ranked 13th on the Institutional Investor’s Alpha Rich List after earning $330 million in 2012, is part of an investor group that shelled out more than $90 million for a duplex penthouse at New York City’s One57 condominium, which has not yet been completed. Another penthouse at the building is also under contract to be sold for more than $90 million.


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Meanwhile, a sprawling, 50½-acre waterfront property has been put up for sale in the heart of wealthy hedge fund managers’ favorite suburban locale: Greenwich, Connecticut. The asking price is $190 million for what is called Copper Beech Farm, which includes a 12-bedroom Victorian, French-renaissance mansion; 4,000 feet of water frontage on Long Island Sound; and two offshore islands. Any takers and will the seller get the asking price?

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Chris Hansen’s bid to buy a basketball team has ended…for now. The Maloof family and Robert Hernreich have agreed to sell their 65 percent stake in the Sacramento Kings to a group that plans to keep the team in the California capital after the NBA refused to allow the team to move to Seattle, Hansen’s home town. The controlling stake is being purchased for $347 million by a group that includes technology entrepreneur Vivek Ranadive and former Facebook executive Chris Kelly.

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Dan Loeb’s Third Point Offshore Investors is up 5.7 percent this month, through May 15, bringing its gains for the year to 18.4 percent in its U.S. dollar shares and as high as 20 percent in its British sterling shares. Yahoo, its largest holding at the end of April, is up 7.5 percent this month alone, while AIG, its third largest holding, is up more than 10 percent in April.

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