Hedge fund takes sizeable “long equity position” in Nokia in anticipation of post-Microsoft deal gains

Nokia

Billionaire hedge fund manager Daniel Loeb has revealed that his fund has taken a sizeable “long equity position” in Nokia expecting that its value will soar following the sale of its handsets division to Microsoft.

In a letter to investors to his hedge fund Third Point, he said that the “New Nokia” will have approximately 8 billion EUR of net cash when the transaction closes, and he expects that a meaningful portion of the excess will be distributed to shareholders in coming quarters.

The letter went on to add: “We think the repositioning of the new Nokia story will take time for the broader investment community to absorb, which allows us to initiate the position at such a significant discount. Meanwhile, the prospect of a substantial one-time capital return and possible reinstatement of a regular dividend further enhance our upside potential.”

Following the investment, Nokia’s share price rose by nearly 3%.

The Third Point hedge fund manages around $14 billion in assets and is one of the industry’s best performers.

  • PeterSteinbeck

    This guy presumes the money from Microsoft will be paid to shareholders rather than invested in R&D…

    • Truffol

      True. As a financier Daniel Loeb seems to be focusing too much on their balance sheet and cash position instead of the joint company’s future potentials. History says that when two struggling companies (ie. MS is struggling in the mobile space. not struggling financially as a whole) get together as a desperate act of survival they usually perish eventually. Let’s hope this is a different story.

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