Seth Klarman's Baupost Group Sells Out Of Targacept (TRGT) ~ market folly

Monday, April 9, 2012

Seth Klarman's Baupost Group Sells Out Of Targacept (TRGT)

Seth Klarman's hedge fund firm Baupost Group just now filed an amended 13G with the SEC. In it, they disclose that they've sold completely out of their equity position and no longer own any shares.

This disclosure was made due to activity on March 31st, 2012 which portfolio managers will note is coincidentally the end of the first quarter.

Baupost Group had previously owned 6 million shares in TRGT, initially revealing the position just a short time ago (in the fourth quarter of 2011). This position represented only a miniscule slice of Baupost's already small long US equity allocation.

It appears as though the hedge fund exited their shares after news broke that AstraZeneca had given up on an experimental anti-depressent drug (licensed from Targacept). Additionally, TRGT then said that the company would be ending the development of its diabetes drug. In response, shares dropped from $7.49 to the current price of $4.85.

Baupost Group is listed as one of the top 10 hedge funds by net gains since inception.

Per Google Finance, Targacept is "a biopharmaceutical company engaged in the design, discovery and development of neuronal nicotinic receptor (NNR) Therapeutics for the treatment of diseases and disorders of the nervous system. The Company’s NNR Therapeutics target NNRs."

You can view other portfolio activity from Baupost Group here.

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