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 The New York-based firm, which ranked as J.C. Penney's second
biggest investor, sold 19.98 million shares during the last three
months of 2013, according to a regulatory filing on Friday. It also
cut its stake in Herbalife, where it was the fifth biggest investor.
J.C. Penney and Herbalife spent most of last year in the spotlight,
with the retailer's stock price losing half its value as an
ambitious overhaul fizzled and the nutrition and weight loss company
surging 139 percent in the wake of a dramatic faceoff between some
of the world's biggest investors.
At both companies, Soros' involvement, fueled by the firm's history
of making a lot of money on savvy bets, boosted the share price and
raised their credibility quotients, possibly even drawing in other
hedge fund investors.
In the 40 years since 83-year old George Soros founded the firm, it
has earned its investors $40 billion, including $5.5 billion last
year, according to industry data. Even though the firm now invests
only Soros' personal fortune, its investment decisions are still
followed closely.
So when Soros bought 17.4 million J.C. Penney shares in April, not
long after Ron Johnson was ousted as chief executive officer,
investors cheered and pushed the share price up.
But as the company's once-ambitious turnaround plans lost steam and
a former CEO returned to the helm, its biggest investor, William
Ackman's Pershing Square Capital Management, abruptly exited in
August. The share price kept tumbling and has lost 68 percent in the
last 12 months.
While Soros was a steady J.C. Penney supporter through the end of
the third quarter, the firm evidently changed its mind in the last
months of 2013.
It had company in the form of other prominent managers who also
exited. Richard Perry, whose Perry Corp owned 10 million shares,
sold out, and Kyle Bass's Hayman Capital liquidated its 5.6 million
shares. David Tepper's Appaloosa Management sold all of its 737,800
shares.
Fund managers who oversee more than $100 million are required by the
U.S. Securities and Exchange Commission to report their U.S. stock
holdings 45 days after the end of the quarter. And while the
information is often backward looking, it can shed light on certain
trends.
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J.C. Penney did not lose all support, however, with filings showing
that Larry Robbins' Glenview Capital kept its stake steady at 12.3
million shares and Highfields Capital still owned 3.2 million shares
at the end of the fourth quarter.
Soros' involvement was similarly critical at Herbalife, where the
media quickly identified Soros and Carl Icahn, Herbalife's biggest
backer with $16.9 million shares, as the industry's elder statesmen
facing off against a younger rival, Ackman. The 47-year-old's
Pershing Square Capital Management has a $1.16 billion short bet
against Herbalife and is accusing the company of running an illegal
pyramid scheme. The company denies that accusation.
Icahn kept his Herbalife holding steady, but Soros has now trimmed
its stake to 3.2 million shares from 5 million shares.
The family foundation of Soros' former lieutenant, Stanley
Druckenmiller, no longer listed Herbalife on its filing, after
having had held 79,032 shares at the end of the third quarter.
Hayman's Bass, another closely followed manager, liquidated his
firm's stake by selling 436,371 shares.
Other firms have take some money off the table. Tiger Consumer
Management cut its position by 48 percent to 400,000 shares, while
Adage Capital Partners cut its stake by 40 percent to 441,276
shares.
Since January, a U.S. lawmaker's calls for regulators to probe
Herbalife's business practices has helped push its share price down
15 percent.
(Editing by Jonathan Oatis)
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