Hedge Fund D.E. Shaw & Co Boosts Priceline.com (PCLN) Stake ~ market folly

Tuesday, September 15, 2009

Hedge Fund D.E. Shaw & Co Boosts Priceline.com (PCLN) Stake

We've got two portfolio adjustments to cover regarding the holdings of quant focused D.E. Shaw & Co. Firstly, in a 13G filed with the SEC, David E. Shaw's hedge fund firm has disclosed a 5.1% ownership stake in Priceline.com (PCLN). They now own 2,096,755 shares and the filing was made due to activity on August 31st, 2009. They have boosted their stake in this name because as of June 30th, 2009 (their 13F filing), they owned 336,302 shares of common stock as well as 411,100 shares represented by Calls in options markets. Additionally, they also owned 202,000 shares worth of Puts on PCLN. So, in the last 3 months, they've certainly boosted their holdings and have acquired a sizable stake. This is interesting to see mainly because numerous other prominent hedge funds we track have entered large positions in Priceline.

Secondly, we see that D.E. Shaw & Co has filed a 13G on Spectrum Brands (SPEB) as well. The hedge fund now shows a 14% ownership stake with 4,201,138 shares. In addition to the 13G, they also filed a Form 4 to show that their current share tally was achieved by selling 25,000 shares at $23 per share and selling 40,000 shares at $22.40 per share, with both transactions taking place on the 3rd of September. While they sold a few shares, they still obviously have a large stake left. Shares of SPEB trade on the OTC Bulletin Board.

In terms of other recent notable activity, we saw back in June that D.E. Shaw filed a 13G on Medicis Pharma (MRX). While we haven't seen their performance figures the past few months, we did note that their Oculus fund was up 2.8% for the year as of the end of June. Their Composite fund was up 12.5% over the same timeframe. While D.E. Shaw & Co is a hedge fund, it is also a private equity firm and technology development shop all in one. Founded in 1988 by David E. Shaw, they manage over $33 billion and recently announced they would be opening an office in Dubai. Please note that they employ mainly quantitative and statistical arbitrage strategies. As such, tracking and cloning their portfolio is not necessarily recommended since we can't necessarily follow the rhyme or reason behind their portfolio maneuvers.

Shaw oversees strategic maneuvers at the firm, but no longer is active in the day to day operations. He received his Ph.D. from Stanford University. Some notable former employees include Jeff Bezos (before founding Amazon.com) and Lawrence Summers, who left the firm to serve on President Obama’s economic team. In Alpha's hedge fund rankings, D.E. Shaw was ranked 6th in the world. We haven't covered their portfolio in its entirety yet, but stay tuned to our hedge fund portfolio tracking series for updates.

Taken from Google Finance, Priceline.com is "a global online travel company that offers its customers a range of travel services, including hotel rooms, car rentals, airline tickets, vacation packages, cruises and destination services. Internationally, the Company offer its customers hotel room reservations in over 75 countries and 27 languages."

Taken from their company website, Spectrum Brands includes brands such as 8 in 1, Cutter, Jungle Labs, Rayovac, Remington, Schultz, and more.

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