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The Morning Brief: Is Jeffrey Ubben Moving Microsoft?

Is ValueAct Capital’s Jeffrey Ubben quietly wielding his influence on Microsoft behind the scenes? It sure seems like it. At the same time the activist hedge fund manager, who eschews the public blustering of Carl Icahn, Daniel Loeb and William Ackman, is negotiating a possible board seat, the company stunned the tech and Wall Street communities Friday when it announced that chief exeucitve Steve Ballmer will retire within 12 months. It is especially surprising given that it comes a month or so after the software giant announced a major restructuring.

Ballmer will leave once a special committee appointed by the board names a successor, drawing on both internal and external candidates. The stock surged more than 7 percent on the news, closing at $34.76. We pointed out earlier in the week that in the second quarter Ubben boosted his stake in Microsoft by nearly 75 percent, to nearly 58 million shares, compared with the first quarter, when he made his initial investment. His additional purchases came at the same time that David Einhorn’s Greenlight Capital was gleefully bailing out of the stock.

The amount of assets invested in emerging market hedge funds rose to a record $154.9 billion at the end of the second quarter, according to industry tracker Hedge Fund Research. The HFRX Emerging Markets Index gained 1.3 percent in the second quarter and is up 2.3 percent year-to-date through July. The Chicago firm said investors allocated $1.79 billion in new capital to emerging market hedge funds, roughly in line with first quarter fund flows.

Facebook, one of the hottest stocks hedge funds didn’t have, surged another 5 percent Friday, closing at $40.54. It is up 60 percent in just the past five weeks alone.

Green Mountain Coffee Roasters, one of Greenlight’s high-profile shorts, surged more than 3 percent Friday and closed at an all-time high of $85.61. In the second quarter, Tiger Cub Tiger Global Management closed out its entire one-million share position while another Tiger Cub, Discovery Capital Management, closed out its entire 540,000 share position. And while Tiger Cub Coatue Management is the tenth largest long in the stock, it cut its stake by 40 percent in the second quarter.

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