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Hedge funds take fresh look at General Motors in Q2
[BOSTON] Several prominent hedge fund managers made bigger bets on US automaker General Motors during the second quarter, despite the company's battling a deadly ignition defect and tangling with shareholders over its stock price.
Greenlight Capital's David Einhorn bought 7.9 million shares between April and the end of June, raising his investment to 14.6 million shares. Mr Einhorn had told investors about the stake but details on how much he actually bought were only released on Friday in a regulatory filing.
For Mr Einhorn it marks the return to a company he had long invested in but exited nearly a year earlier.
Soroban Capital opened a new position in GM, buying 3.5 million shares, while Leon Cooperman's Omega Advisors bought 1.8 million shares, raising the firm's stake to 3.6 million shares.
Investment managers are required to say what they owned at the end of every quarter and these so-called 13-F filings, while backward looking, often highlight new investment trends.
GM ranks as one of the most iconic US companies. But it faced a distracting battle with shareholders earlier this year when a group threatened to mount a proxy fight for board seats in order to push the carmaker to give some of its cash to investors.
The company approved plans to buy back US$5 billion in stock.
Hedge fund mogul David Tepper was one of the investors pressuring the company early in the year and in the second quarter his Appaloosa Management bought an additional 3.5 million shares, raising its stake to 18.8 million.
Taconic Capital Advisors, a long-time investor, bought only a few more shares, to push its investment to 8.2 million. Kyle Bass' Hayman Capital, one of the dissident investors, kept its stake unchanged.
Faulty ignition switches have been linked to more than 100 deaths. But stronger second-quarter earnings helped the stock price gain last month even though it is still off 10 per cent for the year, closing at US$31.50 on Friday.