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Stake Buy & Sell: Market Gets Busy - Analyst Blog
9/4/2013 2:35:00 PM
The market is keenly following every move of big investors and the corporates -- be it offloading or boosting their stakes.
In the latest update, Carl Icahn offloaded approximately 50% of his stake in The Hain Celestial Group, Inc. ( HAIN ). However, he will remain a major stockholder in the natural food and personal care products maker.
Icahn and related entities informed the company about the sale of 3,650,000 shares to Jefferies LLC, acting as an underwriter, who also has an option to buy 547,500 shares more to meet the surplus demand. Consequently, Icahn and related entities will own 3,589,963 shares, or 7.5% of the outstanding shares of Hain.
However, the news failed to provide any impetus to the stock, which incidentally dropped 2.7% or $2.24 to $79.64 during after-market trading hours. Considering the year-to-date performance, the stock has jumped 45% and remains a healthy option for investors to reap the benefits.
Another headline story is Bank of America Corporation ( BAC ) selling its remaining 1% stake (or 2 billion shares) in China Construction Bank Corp. This is the second U.S. bank after The Goldman Sachs Group, Inc. ( GS ) that exited from China, which was once looked upon as a lucrative destination for doing business. The investment firm divested its remaining $1.1 billion stake in Beijing-based Industrial and Commercial Bank of China Ltd.
It seems that market is ready to digest more, as the world's largest software maker Microsoft Corporation ( MSFT ) recently announced plans to buy Finnish company Nokia Corporation 's ( NOK ) handset business for $7.2 billion. The deal will enable Microsoft to grab the opportunities in the fast-growing mobile segment.
However, shareholders remain skeptical about the deal as Nokia has found it difficult to dominate market share with Google Inc. 's ( GOOG ) Android and Apple Inc. 's ( AAPL ) iOS mobile platforms heating up the competition. On the other hand, Microsoft's Windows Phone OS has remained far from being popular.
Meanwhile, investors were also witness to one of the biggest deals in the wireless industry when Verizon Communications Inc. ( VZ ) said it will shell out $130 billion to acquire a 45% stake in Verizon Wireless currently held by Vodafone Group PLC ( VOD ).
For Verizon, the total buyout of its wireless business would mean saving a substantial amount of the payment that slips to Vodafone's pocket. While for Vodafone it means an exit from one of its legacy markets -- North America -- and instead focus on its business in Europe and emerging markets like India and Africa.
Further adding to the streak of stake buy & sell activities is the story of J. C. Penney Company Inc. ( JCP ). The beleaguered retail chain has lost much of its sheen in the stock market. However, some hedge funds are still bullish on J. C. Penney.
According to a recent regulatory filing, Kyle Bass' Hayman Capital has acquired 11.4 million shares or 5.2% stake in the company. Alongside, Larry Robbins' Glenview Capital Management disclosed that it now owns 20.1 million shares or 9.1% stake in the company.
Last week, terming his investment in J. C. Penney a "failure," shareholder Bill Ackman sold his entire 18% stake in the company for a huge loss. Ackman demanded the ouster of the interim CEO Mike Ullman and Chairman Tom Engibous, which backfired and he resigned from the company's board. Ackman got the support of hedge fund Perry Capital, which also seeks to replace Ullman with Ken Hicks of Foot Locker, Inc. ( FL ). Perry Capital also raised its stake to 8.6% in J. C. Penney.
Market seems to have witnessed enough events in a span of few days, and it will not be a surprise if any news of divestment or acquisition hit in the coming days.
APPLE INC (AAPL): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
FOOT LOCKER INC (FL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
HAIN CELESTIAL (HAIN): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
VODAFONE GP PLC (VOD): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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