Some of the biggest hedge funds that helped make Apple Inc a stock
market darling lost faith and dumped their stakes in the fourth quarter,
fueling the massive drop in the iPhone maker's share price.
stock pickers including Leon Cooperman, Eric Mindich and Thomas Steyer
unloaded billions of dollars of Apple shares between September 30 and
December 31, according to disclosure documents filed on Thursday.
of Apple rose to an all-time high of $705.07 on September 21 but ended
2012 down more than 24 percent from that peak, as concerns about
increasing competition and declining profit margins weighed.
The shares also may have dropped because their price rose too much, too fast.
stock just went up so much in early 2012 and then was coming back to
earth," said Justin Walters, co-founder of Wall Street research firm
Bespoke Investment Group. "Three months from now, we'll be seeing a lot
of the people who sold starting to pick it up again."
fourth-quarter sellers avoided even deeper losses. Apple's shares have
lost 12 percent so far this year. The shares were up $1.95, or 0.4
percent, at $468.96 on the Nasdaq on Thursday.
Advisors fund dumped its entire stake of more than 266,000 shares during
the fourth quarter, according to its required quarterly disclosure form
filed with the Securities and Exchange Commission.
the youngest partner ever at Goldman Sachs before starting his Eton
Park Capital Management fund in 2004, got out of Apple entirely in the
fourth quarter after making big sales in the third quarter as well. Eton
owned 600,000 shares at the beginning of 2012.
the hedge fund founded by Steyer, sold 137,000 shares. Steyer, who once
worked on the Goldman Sachs risk arbitrage desk under Robert Rubin,
stepped down at the end of the year from the firm, which he founded in
1986. Rubin served as U.S. Treasury secretary from 1995 to 1999.
Jana Partners, an activist fund run by Barry Rosenstein, also unloaded its entire Apple stake of more than 143,000 shares.
the plunge in Apple's stock price, most of the managers likely exited
their positions with substantial profits because they bought years
Rosenstein and Cooperman, for example, both started
gathering their stakes in the middle 2010, at a time when Apple shares
traded below $300.
At the time, the company's iPhone 4 was beset
by alleged faulty reception, a problem that became known as
"antennagate." Apple's then-chief executive, the late Steve Jobs,
famously dismissed the issue, saying "we don't think we have a problem."
But Apple offered customers a free bumper case that was supposed to
minimize any issues.
Customers did not seem to care, snapping up
millions of iPhones and sending Apple's share price up almost 50 percent
over the next year.
Apple came under further scrutiny last week
from prominent hedge fund manager David Einhorn. Einhorn's fund,
Greenlight Capital, owned more than 1 million shares of Apple at the end
of September. Greenlight's updated regulatory filings are to be
released later today.
Einhorn filed a lawsuit to block changes in
Apple's policy for issuing preferred stock. Instead, Apple should issue a
new class of preferred stock to share more of its $137 billion cash
hoard with shareholders, Einhorn said.
Apple Chief Executive Tim Cook dismissed the moves as a "silly sideshow" on Tuesday.
Not all well-known hedge fund fans of Apple cut ties in the fourth quarter. Some only trimmed their holdings.
Laffont, who worked under famed hedge fund manager Julian Robertson
before striking out on his own at Coatue Management, sold about 18
percent of his Apple shares. Coatue ended the year with a still sizable
Chase Coleman, another manager who worked for
Robertson, reduced the Apple stake at his Tiger Global Management fund
by 19 percent to just over 1 million shares.
Robertson's own Tiger Management LLC fund trimmed its Apple stake by 28 percent to about 42,000 shares.
Large hedge funds are required to disclose their U.S. stock holdings within 45 days after the end of each quarter.
the filings may not give a complete picture of each fund's moves, since
only U.S.-listed shares and options must be revealed. Bonds, foreign
shares and derivatives are not included, and short positions, or bets
that a stock will fall in price, are not listed.
© Thomson Reuters 2013