Legendary shareholder activist investor Carl Icahn tweeted that he has taken a sizable stake in Apple. “We believe the company to be extremely undervalued,” Icahn wrote. He also said he spoke to Apple chief executive Tim Cook about a potential stock buyback. Is this really what an R&D-driven company that is pressed to find the next blockbuster product should be doing with its cash? In any case, the stock surged more than 5 percent to a six-month high of around $490.
Although a number of high profile hedge fund managers were bailing out of the stock earlier in the year, a few held sizable positions at the end of the first quarter, including Greenlight Capital and D.E. Shaw. In the next few days, hedge funds will be reporting their equity holdings as of June 30.
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The J.C. Penney soap opera is more interesting than the chain’s drab merchandise. In Tuesday’s installment, activist hedge fund manager William Ackman of Pershing Square Capital Management announced he resigned from the board, effective Monday. He is being replaced by retail veteran Ronald Tysoe, who spent 16 years as vice chairman at Federated Department Stores. The board also said it plans name another director in the near future.
“During my time on the J.C. Penney board of directors, I have always advocated for what I believe to be in the best interests of the company — its stockholders, employees and others,” Ackman said in a statement. The big question now is, when does Ackman start unloading his stock, for which he paid, on average, around $25 a pop? After all, as a former director, he is in possession of a fair amount of insider information. Only his lawyers know for sure. Meanwhile, Penney’s stock sank another 3.72 percent, to $12.68, underscoring its new policy to mark down merchandise.
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Scout Capital Management continues to reduce its stake in DineEquity. The New York hedge fund firm, founded in 1999 by James Crichton and Adam Weiss, has backed off from its activist pursuit of the casual dining chain, selling another 222,0000 shares. This has reduced its stake to 4.2 percent. Scout also has an activist stake in Tim Hortons, the Canadian coffee and donut chain.
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Hedge fund Glenview Capital Management, which owns 14.6 percent of Health Management Associates, said a majority of shareholders have voted for the removal and replacement of the entire board of directors of HMA in its consent solicitation process.
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David Tepper’s Appaloosa Management boosted its stock portfolio by nearly 50 percent, to more than $6.9 billion, at the end of the second quarter compared with the prior period. By far its largest holding was a $1.3 billion position in the exchange-traded fund that tracks the S&P 500, while its third largest holding was a $409 million stake in the ETF that tracks the Nasdaq 100.
