David Tepper’s Appaloosa Management eked out a small gain last year, posting its worst results since it lost money in 2011. The Short Hills, New Jersey-based manager’s Palomino Fund posted a 0.21 percent profit in December, bringing its gain for the year to 2.2 percent.
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Carl Icahn has moved on to his newest target — Gannett. The corporate raider-turned-activist investor warned of a possible proxy fight, informing the publishing giant that he plans to nominate two directors at its upcoming annual meeting. Icahn also submitted several proposals to improve the company’s corporate governance.
In a letter to the company and Gracia Martore, its president and CEO, Icahn said he is concerned that once Gannett completes its upcoming spinoff, its two companies — publishing and broadcasting and digital — will become takeover targets themselves due to their “extremely valuable assets.”
Icahn plans to submit various proposals at the annual meeting, including calling on Gannett to adopt a charter provision that pledges not to implement a poison pill without the approval of the majority of its shareholders, except for a brief, 90-day pill in response to a hostile tender offer. Icahn also wants a charter provision that would permit holders of at least 10 percent of the shares to call a special meeting of shareholders.
“It is my belief that these proposals are an important first step towards protecting Gannett shareholders, preserving their rights and making it simpler for either company to be acquired if shareholders wish to see this effectuated,” Icahn states in the letter. Not surprisingly, shares of Gannett jumped 2.26 percent, to $32.07.
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Did you hear about the hedge fund manager who apologized to his investors for his horrible performance? No, it was not one of the hundreds of managers who regularly lag the hedge fund average return year in and year out. Rather, it was a guy named Owen Li, founder of New York-based Canarsie Capital, who told his limited partners he was “truly sorry” for losing virtually all their money. The guy is down to the fund’s last $200,000 — from roughly $100 million as recently as late March, according to a report from CNBC.com.
“I take responsibility for this terrible outcome,” Li wrote in a letter to investors, according to the report. “My only hope is that you understand that I acted in an attempt — however misguided — to generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse.” Wow!
Li told his investors he made a number of “aggressive transactions” over the past three weeks in a desperate bid to make back his poor returns in December, according to CNBC.com. Specifically, he made long bets on stock price options, but the indices fell instead, resulting in huge losses, as well as other undisclosed direct investments, according to the letter.
Li is a former trader at Raj Rajaratnam’s Galleon Group, the firm that went out of business after the founder went to prison for engaging in illegal insider trading. Li’s number two is Ken deRegt, who joined the firm in 2013 after retiring as the global head of fixed income sales and trading at Morgan Stanley. CNBC.com notes that his son Eric deRegt also worked at Canarsie.
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Shares of Lands’ End plummeted 17.4 percent on Thursday after the apparel company delivered disappointing forecasts, blaming a decrease in the number of Lands’ End Shops at Sears stores, a decrease in same-store sales and other factors resulting from its arrangement with Sears Holdings as part of its earlier spinoff. The stock is now down more than 22 percent this month alone. Edward Lampert’s ESL Partners is the largest owner of Lands’ End, with nearly 25 percent of the shares. D.E. Shaw & Co. was also one of the 10 largest shareholders at the end of the third quarter. Shares of Sears Holdings fell less than one percent on Thursday after dropping more than 3 percent in the pre-market.
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Family Dollar Stores shareholders approved a takeover offer from rival Dollar Tree, thus rebuffing a higher offer from another rival, Dollar General. Shares of Family Dollar rose 1.2 percent, which actually was less than the overall market on Thursday. Dollar Tree surged 3.6 percent while Dollar General jumped 3.7 percent.
Nelson Peltz’s Trian Fund Management is the largest shareholder of Family Dollar, with 7.31 percent of the shares as of year-end. At the end of the third quarter, John Paulson’s Paulson & Co., Daniel Och’s Och-Ziff Capital Management, Paul Singer’s Elliott Management Corp. and Jonathon Jacobson’s Highfields Capital Management were also top-10 holders.
