Not Quite the Whole Truth About Harbinger

Philip Falcone, principal of Harbinger Capital Partners, broke cover Monday night to tell Reuters that:

investors would be mistaken if they thought selling by Harbinger was behind the double-digit percentage declines in stocks it holds, including [The New York] Times (NYT), Media General Inc (MEG), Cablevision Systems Corp (CVC), Cleveland-Cliffs Inc (CLF) and Calpine Corp. (CPN).

Unmentioned by either Reuters or Falcone was Harbinger’s ejection button interaction which, over four trading days between Sep. 4 and Sep. 9, cut its stake in AK Steel (AKS) almost in half, from around 10.5 million shares. The stock, which had closed at $45.53 on Sep. 3, dropped 27 percent to put in what was then a new 52-week intraday low of $33.05 on Sep. 9, during Harbinger’s dumpage; Falcone collected an average $39.00, for proceeds of $182 million or thereabouts. 

Nice trade, given AKS closed Monday at $31.82, off an impressive 19 percent amidst the carnage.

Two things:

• US Steel (X) dropped 22 per cent over the same period, indicating that Falcone was not the only big seller of steel shares abroad, so

• Let’s not give Harbinger too much credit. AKS traded almost 42 million shares over the four days in question, making Harbinger’s sales a visible, but hardly dominant, participant in the dumpage. 

Harbinger Capital Partners et al

US Securities and Exchange Commission

Form 4: Sep. 8 2008  Sep. 10 2008 

Harbinger says it’s not dumping Times, Media General

by Greg Newton

Reuters Sep. 15 2008