Lone Pine Capital Increases Short Position in Rolls Royce ~ market folly

Monday, October 5, 2015

Lone Pine Capital Increases Short Position in Rolls Royce

Steve Mandel's hedge fund firm Lone Pine Capital has recently made some disclosures regarding their short position in shares of Rolls Royce (RR.L) in the UK.

We previously highlighted Lone Pine's initial short in RR shares earlier this summer and now they've increased their short position further.  Per filings made with the UK's FCA, Mandel's firm increased the short to 0.66% of shares on September 22nd, up to 0.76% of shares on September 23rd, and then finally up to 0.85% of shares a day later.  This is the most recent disclosure.

As we've also detailed, this is now somewhat of a battleground stock between two well respected investment managers as Jeff Ubben's ValueAct Capital is long RR.  They obviously saw an opportunity for activism here and are long-term investors.  Lone Pine, on the other hand, is looking to take advantage of the near-term troubles at the company.

We've posted a bunch of short position updates this week.  You can scroll through them all by clicking here: hedge fund short positions.

The UK regulatory rules for short position disclosures state that hedge funds must file when their net short position eclipses 0.2% of the issued share capital of a company.  Notification is also required again at each 0.1% increment after that.  This applies to both increases and decreases in the position.  Public disclosure is required when net short positions reach 0.5% of issued share capital.  Additionally, disclosure is required when the position subsequently falls below 0.5%.

You can read more recent portfolio activity from Lone Pine here.

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