market folly

Today Dan Loeb's hedge fund firm Third Point filed an amended 13D with the SEC regarding their position in Sotheby's (BID).  Per the filing, Third Point has disclosed a 9.3% ownership stake in BID with 6,350,000 shares.

This marks a 154% increase in the size of their position since they initially filed a 13D on Sotheby's back in August.  Third Point was out buying BID shares sporadically throughout August and then really ramped up their stake on September 30th, buying a ton of shares in the low $49's.


Loeb's Letter To Sotheby's CEO

Loeb then sent Sotheby's CEO a letter which we've embedded below:




Third Point highlights pressing issues at the company, management's lack of alignment with shareholders, and limitations in formulating and executing strategic initiatives.

As we've highlighted before, a few other activist hedge funds own BID shares as well, such as Nelson Peltz's Trian Fund and Mick McGuire's Marcato Capital Management.

One funny sidenote to the story: CNBC's David Faber spoke with Loeb, who said that BID sent him to the investor relations department when he reached out to the company.  Classic.


Third Point's September Exposure Report

Also worth mentioning: Third Point's Offshore Fund finished September up 2.6% and is up 18% year-to-date.  The hedge fund's net long equity exposure at the end of the month was 45.8% net long (61.4% long, -15.6% short).