Harbinger Capital Partners Gains Stake in Zap.com (ZPCM) ~ market folly

Tuesday, July 14, 2009

Harbinger Capital Partners Gains Stake in Zap.com (ZPCM)

Philip Falcone's hedge fund Harbinger Capital Partners has made 4 filings of note with the SEC recently that are all related. Firstly, they've filed a 13D on Zap.com Corp (ZPCM) where they now show a 99.5% ownership stake in the company with 49,730,165 shares. The filing was made due to activity on July 9th, 2009. What's interesting about this filing is that Harbinger only directly owns 757,907 shares of ZPCM. However, you'll remember that Harbinger also has a large position in Zapata (ZAP). Well, Zapata holds 97.9% of the outstanding stock of Zap.com (ZPCM) and through their own direct ownership interests in Zapata, Harbinger now also has a large exposure to ZPCM. A little bit confusing with all the similar names and stock symbols, but hopefully everyone follows.

The 757,907 shares Harbinger owns directly were purchased on July 9th, 2009 at share prices between $0.66 and $0.67. In addition to the filings concerning Zap.com, Harbinger has also filed a Form 4 with the SEC which details additional purchases of Zapata (ZAP) shares. On July 9th, 2009, Philip Falcone's firm acquired 3,312,654 shares of ZAP at a price of $7.50. And, as a result, they also amended their 13D filing which shows them now owning 51.6% of ZAP with 9,937,962 aggregate shares owned. This is up ever so slightly from their previous 51.3% stake.

Two main things to take away here: Harbinger now has a lot of exposure to Zap.com (ZPCM) and they also bought a few more shares of Zapata (ZAP). End of story.

Harbinger has been quite busy with filings lately, as we also detailed their new position in Morgans Hotel Group (MHGC) last week. Also, they were selling a ton of Solutia (SOA) shares as well. But, if you want to see all the other positions they hold, you can just check out their portfolio. Last year, Harbinger ranked #1 in the top 10 asset losers, losing 60.8% on a year over year basis as their Offshore fund finished -22.7% for 2008. We then got word that Falcone would be returning to his roots in terms of investing style and would be opening a new fund. As always, we'll continue to monitor the developments regarding their holdings.

Taken from Yahoo Finance, Zap.com "does not have significant operations. The company focuses on searching for assets or businesses that it can acquire so that it can become an operating company and it may also consider developing a new business suitable for its situaiton. Previously, it was engaged in internet operations business."

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