market folly

Dan Loeb is out with Third Point's Q3 letter and in it the hedge fund firm reveals they started a new stake in Nokia (NOK) in the third quarter after the company sold some of its businesses to Microsoft.  The other main takeaway is that due to strong performance, Third Point will return 10% of capital at year-end.


Third Point's Thesis on Nokia

Third Point writes,

"At our purchase price, we seized an opportunity to create new Nokia at a substantial discount to target value.  The company will have approximately €8 billion of net cash when the transaction closes, and we expect a meaningful portion of the excess will be distributed to shareholders in coming quarters.  Either a buyback or a special dividend is possible, which should draw additional investors to new Nokia when the cash return scenario develops following the deal closing."

This is the kind of event-driven play they like and their letter below details the breakdown of the separate businesses left at the 'new' Nokia.


Third Point's Q3 Letter

Embedded below:




For more Q3 hedge fund letters, head to:

- David Einhorn's Q3 letter

- Excerpts from Cobalt Capital's letter

- Corsair Capital's thesis on News Corp