Tuesday, August 18, 2009

Soros Slashes Stock Holdings, Especially In Energy (COP; PBR; POT)

From FINalternatives:

Soros Fund Management trimmed its stock holdings in the second quarter by more than $300 million, with the cuts falling particularly hard on its biggest investment.

The New York-based hedge fund reported $4.2 billion in stock holdings as of the end of June, according to a Securities and Exchange Commission filing. That’s down from $4.51 billion at the end of the first quarter.

Much of the drop can be attributed to a sharp reduction in Soros’ stake in Petrobas, the Brazilian state-owned energy company. The hedge fund cut its holdings of the company’s American depositary receipts by half. Soros also liquidated its position in oil company ConocoPhillips, and cut back on its holdings of fertilizer company Potash Corp. and retail giant Wal-Mart Stores.

The hedge fund did boost some of its stakes, including those in Autozone and Burger King Holdings.

HedgeFundNet has a different take on the moves:

Soros Active on Petrobras, Energy
George Soros has cut his stake in Petroleo Brasileiro.

The hedge fund billionaire sold off a chunk of the energy company, his biggest holding, in the second quarter.

A filing showed Soros, head of Soros Fund Management, sold common stock and bought up preferred stock in the company.

The move would indicate that Soros is looking to capitalize on a spread between each type of stock.

The filling with the SEC also showed Soros built his stake in oil company Hess Corp. to a $5.1 million share position.

He also bought up InterOil, Plains Exploration & Production and Suncor Energy.

In addition to cutting his position in Petrobras, Soros decreased his ownership of Potash Corp. and ConocoPhillips.
Here's some more detail from Bloomberg:
Billionaire George Soros cut his stake in his biggest holding, Petroleo Brasileiro SA, in the second quarter while buying more shares of other energy producers.

His New York-based hedge-fund firm, Soros Fund Management LLC, sold 22 million U.S.-listed common shares of Petrobras, as the Brazilian oil company is known, according to a filing today with the U.S. Securities and Exchange Commission. Soros bought 5.8 million of the company’s U.S.-traded preferred shares.

Soros is taking advantage of the spread between the two types of U.S.-listed Petrobras shares, said Luis Maizel, president of LM Capital Group LLC, which manages about $4 billion. The common shares were 21 percent more expensive than preferred today, according to data compiled by Bloomberg.

“He knows he held a voting right in the common shares that would never translate to actual power,” Maizel said in an interview from San Francisco. “He’s just playing the spread.”

Petrobras preferred shares have also a 10 percent additional dividend, said William Landers, a senior portfolio manager for Latin America at Blackrock Inc.

“Given that there will most likely never be a change in control in the company, I see no reason to pay a higher price for the common shares.” Brazil’s government controls Petrobras and has a majority stake of voting shares....MORE

Here's Mr Soros giving Congressional testimony:

You have my word as a hedge fund manager....

[George Soros]

From our post "Russia calls for currency conference; Soros Says G20 "Make or Break" and "I'm Having a Very Good crisis":

[the picture and the comment above it were not part of this story, just a little editorializing on Climateer's part -ed]

I wouldn't trust these guys if they told me the time of day.

[and a little more. Are you done? Catharted? -ed]