Hedge Fund Makes Quick Work Of Barnes & Noble Stake

Activist hedge fund Jana Partners in August sold the remainder of its stake in Barnes & Noble, after amassing a 12% position in the stock, new SEC filings show.

The investment by the fund, which is led by one-time billionaire Barry Rosenstein, proved well-timed. Less than two weeks after Jana disclosed its stake—some 7 million shares—Barnes & Noble stock jumped 52% in one day, driven by news that Microsoft would invest in the company’s e-book division and Nook tablet. The stock ended April 30 at $20.75, far above the time period earlier this year when Jana built its position.

Reported by Abram Brown, Rosenstein was gleeful that day, appearing on television networks and touting his investing thesis: “The question is: Why was any body short that stock?” he said. “We got the Nook business for nothing.” The firm did not enter the position as an activist, a person familiar with the firm’s thinking says. So, as the shares appreciated, Jana reevaluated the investment thesis and ultimately exited the position—the result of ordinary portfolio management, the person says.

Jana began to sell the day that the Microsoft news broke. It sold 1 million shares, $24 million transaction. From there, the stake dwindled: Jana sold nearly 2 million shares from April to June, and by August 31, it had sold the remaining four million shares.

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