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The Morning Brief: David Einhorn’s Green Mountain Short Backfires

Shares of Green Mountain Coffee Roasters got a java jolt and surged more than 3 percent, closing on Wednesday at a new all-time high of $86.66. The stock has more than doubled this year, but not many hedge funds are celebrating. The company is a high profile short sale of David Einhorn’s Greenlight Capital, and it just hasn’t caught on as a long position among hedge funds. On Among the top 25 holders of Green Mountain stock, only one hedge fund appears: Coatue Management. And Coatue’s portfolio managers pared their holdings by about 40 percent in the second quarter of this year.

Jeffrey Smith’s Starboard Value hedge fund has raised its stake in chip maker Tessera Technologies to 8.6 percent, making this the activist hedge fund’s third largest holding in its concentrated portfolio. Earlier this year, Tessera and Starboard reached a settlement that resulted in six of Starboard’s nominees joining the 10-member board of directors, including Peter Feld, who is a managing member and head of research at Starboard.

Shares of J.C. Penney dropped more than 3 percent to close at $12.75 on Wednesday. That’s a little higher than the $12.60 that William Ackman got when he sold his 39 million shares of the stock to Citigroup, which is underwriting the sale.

Steve Cohen’s SAC Capital Advisors disclosed it has tripled its stake in Diamond Foods since the end of the second quarter, boosting its position to 5.1 percent of the outstanding shares. The disclosure was made in a 13G, meaning it is a passive investment.

Is Karsch Capital Management‘s Michael Karsch undergoing a mid-career crisis? The 45 year-old fund manager said he plans to return 95 percent of the client money in his $1.8 billion firm. “I feel as I approach 20 years as an investment manager, it is time for me to take a step back, reflect on my experiences and begin to think about the next chapter of my career,” Karsch wrote in a letter to clients, according to Bloomberg News. Karsch, who started his fund in 2000, was previously a managing director at Soros Fund Management.

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