Lone Pine Capital Reduces Esprit Stake ~ market folly

Wednesday, November 28, 2012

Lone Pine Capital Reduces Esprit Stake

Steve Mandel's hedge fund firm Lone Pine Capital recently reduced its holdings in Hong Kong listed Esprit (HK:330). 

Lone Pine sold nil-paid rights in two transactions on November 7th and 9th.  In total, they sold 62,538,542 nil-paid rights at average prices of HK$3.10 and HK$3.50, with the bulk of the transaction taking place at the latter price, according to Hong Kong exchange disclosures. 

This reduces their ownership stake in Esprit down to 10.88% as they still have exposure to just under 211 million shares.  Lone Pine disposed of most of the rights shares they were allocated.  The company plans to use the proceeds of the recent rights issue to partially fund a facelift to compete with other retailers like Zara.

Also worth highlighting is the fact that around the same time, Esprit's former chairman Michael Ying added to his stake in the company. He now owns more than 10%.

Previously, we had highlighted how Lone Pine was buying Esprit back in June of this year.

For more of Lone Pine's recent activity, we've highlighted Steve Mandel's pitch on VeriSign.

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