Hedge funds shower love on Green Mountain, Yahoo

Nov 15 2012, 10:36 IST
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SummaryOther filings reveal that $6 billion Tiger Global Management made a big bet on Yahoo Inc.

Patrick McCormack, the manager of hedge fund Tiger Consumer Management, decided to bet against rival David Einhorn in the third quarter.

McCormack's $2 billion fund jumped into two stocks that Einhorn, founder of $8 billion Greenlight Capital Management and one of a handful of savvy traders who can move markets with his short calls, has said publicly he is shorting, or betting against.

Quarterly regulatory filings for Tiger Consumer show McCormack acquired a 280,000 share stake in Chipotle Mexican Grill Inc and increased his fund's stake in Green Mountain Coffee Roasters Inc by 500,000 shares to 1.5 million shares.

Einhorn, one of the $2 trillion hedge fund industry's most closely watched managers, has given presentations questioning the prospects for both Chipotle and Green Mountain Coffee.

Also taking the opposite side of Einhorn on Green Mountain is Dinakar Singh, whose $4 billion TPG-Axon Capital Management opened a 2.5 million share stake in Green Mountain Coffee.

Tiger Consumer and TPG-Axon disclosed their recent moves in so-called 13-F filings, which all large money managers are required to file with the U.S. Securities and Exchange Commission after the close of each quarter.

The filings give a glimpse into the thinking and strategies of managers and, in this case, indicate that while Einhorn is bearish on the two stocks, McCormack is more bullish.

Other filings reveal that $6 billion Tiger Global Management made a big bet on Yahoo Inc by opening a 25 million share position in the internet company, and Philippe Laffont's $3.5 billion Coatue Management acquired 1.4 million shares in social networking company Facebook Inc.

Viking Global Management also took a recent liking to Facebook, a sign that the company's shares may have fallen so much that managers are seeing value in the stock.

Einhorn, meanwhile, went wild over Yahoo, taking a 5 million share stake in the company.

Overall, the third quarter was a good one for U.S. stocks and hedge funds, with the benchmark S&P 500 rising 5.76 percent and the average hedge fund gaining 3 percent. By contrast, stocks have retreated mightily so far in the fourth quarter, with the S&P 500 falling 5 percent as of Nov. 13.

Since 13-F filings are released roughly 45 days after the end of quarter, it is important to note that what might have appeared as profitable bets by a manager in the third quarter might not be so smart right now in light of the recent market reaction.

Much of the selling in

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