Philip Falcone's Harbinger Sells Shares of New York Times (NYT), Leap Wireless (LEAP); Adds Mercer (MERC) ~ market folly

Tuesday, September 22, 2009

Philip Falcone's Harbinger Sells Shares of New York Times (NYT), Leap Wireless (LEAP); Adds Mercer (MERC)

We've got a flurry of SEC filings from Philip Falcone's hedge fund Harbinger Capital Partners. While the update below covers their US equity positions, we just this morning updated their UK holdings for those interested. That aside, let's dive right into the US equity filings:

Firstly, Harbinger has filed an amended 13D on Leap Wireless (LEAP) and is now showing a 5.7% ownership stake with 4,451,100 shares. The filing was made due to activity on September 16th, 2009. It shows them selling shares on the 29th and 30th of July, as well as the 16th and 17th of September. The transactions occurred in their Master Fund and Special Situations Fund and here is a screenshot of their sales:

(click to enlarge)

Harbinger continues to sell shares of LEAP as we detailed their previous sales back in August. They had previously owned over a 9% ownership stake, so they have nearly cut their ownership stake in half since then.

Secondly, Philip Falcone's hedge fund also sold shares of The New York Times (NYT). Due to activity on September 17th, Harbinger filed an amended 13D on NYT and now show a 16.38% ownership stake with 23,538,434 shares. They sold 5,000,000 shares at a price of $8.25 on the 17th of September according to an SEC Form 4 filing, having previously owned a 20% stake. A spokesman for Harbinger addressed the sale by saying, "The New York Times is still a core holding, and the sale was done to take advantage of the strength in the market, to adjust the portfolio accordingly." They have sold these shares at a loss as they initially acquired their shares between $15-20 per share almost two years ago when they invested over $500 million.

In the past, we've covered the fact that Harbinger were open to hearing suitors for their NYT stake. As always, we'll continue to track developments in this regard. In addition to Harbinger, Mexican billionaire Carlos Slim has a hefty position in NYT. Taking a step back and looking at the macro picture, we've questioned whether newspapers are a dying industry. It's definitely a prudent question to ponder and the debate has been cataloged through various mediums. Shares of The New York Times traded way down to as low as $3.51 earlier this year.

Thirdly, in a 13G filed with the SEC, Harbinger is also showing a 5.5% ownership stake in Mercer (MERC). They hold 1,995,100 shares and the filing was made due to activity on September 9th, 2009. This is a new position for them as they did not hold it as of their latest 13F filing which discloses positions as of June 30th, 2009. So they have added these shares over the course of the past 3 months. And with that, we wrap up this portfolio update on Philip Falcone's fund. They've been quite busy recently as we also detailed their position in Spectrum Brands (SPEB) late last week. We also covered their 13D on SkyTerra for those interested as well.

Philip Falcone runs $6 billion Harbinger Capital Partners and while he has numerous equity positions, his background is in the distressed arena. When we saw Harbinger's portfolio, we noted that they had been out adding to natural resource plays amongst a slew of other activity. For more background on them and their portfolio holdings, check out our post on Harbinger here.

Taken from Google Finance,

Leap Wireless is "a wireless communications carrier that offers digital wireless service in the United States under the Cricket brand. Cricket service is offered by Cricket, a wholly owned subsidiary of Leap, and is also offered in Oregon by LCW Wireless Operations, LLC (LCW Operations), and in the upper Midwest by Denali Spectrum Operations, LLC (Denali Operations). Cricket owns an indirect 73.3% non-controlling interest in LCW Operations through a 73.3% non-controlling interest in LCW Wireless, LLC (LCW Wireless), and owns an indirect 82.5% non-controlling interest in Denali Operations through an 82.5% non-controlling interest in Denali Spectrum, LLC (Denali). At December 31, 2008, Cricket service was offered in 30 states and had approximately 3.8 million customers."

New York Times is "a diversified media company, including newspapers, Internet businesses, a radio station, investments in paper mills and other investments. The Company is organized in two segments: News Media Group and the About Group. Additionally, the Company owns equity interests in a Canadian newsprint company, a supercalendered paper manufacturing partnership in Maine, and Metro Boston LLC, which publishes a free daily newspaper in the greater Boston area. In February 2008, it acquired a 25% ownership interest in quadrantONE LLC, an online advertising network that sells bundled premium, targeted display advertising onto local newspaper and other Websites."

Mercer "operates in the pulp business and is a producer of market northern bleached softwood kraft (NBSK) pulp. The Company’s operations are located in Eastern Germany and Western Canada. It operates three NBSK pulp mills with a consolidated annual production capacity of approximately 1.5 million million air-dried metric tons (ADMTs): Rosenthal mill, Stendal mill and Celgar mill."

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