market folly

In a 13G filed with the SEC yesterday after market close, David Shaw's hedge fund firm D.E. Shaw & Co has disclosed a 5.3% ownership stake in Medicis Pharma (MRX). The filing was made due to activity on June 10th, 2009 and they now own 3,136,350 shares.

D.E. Shaw & Co was founded in 1988 by David E. Shaw and manages around $33 billion as of December 1st 2008. They focus on intertwining technology and finance and are a hedge fund, private equity firm, and technology development shop all in one. They employ mainly quantitative strategies and do a lot of statistical arbitrage. Shaw oversees strategic maneuvers at the firm, but no longer is active in the day to day operations. He received his Ph.D. from Stanford University. Some notable former employees include Jeff Bezos (before founding Amazon.com) and Lawrence Summers, who left the firm to serve on President Obama’s economic team. In Alpha's hedge fund rankings, D.E. Shaw was ranked 6th in the world. We haven't covered their portfolio for this quarter yet, but keep an eye out as they'll be featured in our hedge fund portfolio tracking series soon. Back in January, we also noted D.E. Shaw had filed a 13D on Orient-Express Hotels (OEH), in an ongoing situation.

Taken from their website, D.E. Shaw invests “in a wide range of companies and financial instruments within both the major industrialized nations and a number of emerging markets. Its activities range from the deployment of investment strategies based on either mathematical models or human expertise to the acquisition of existing companies and the financing or development of new ones.”

Form 13G is filed with the SEC when a firm takes a 5% or greater stake in a company with passive intentions. A 13D, on the other hand, is when the investor has intentions or going activist to institute change. Taken from Google Finance, Medicis Pharma is "an independent specialty pharmaceutical company focused primarily on helping patients attain a healthy and youthful appearance and self-image through the development and marketing in the United States of products for the treatment of dermatological, aesthetic and podiatric conditions. It also markets products in Canada for the treatment of dermatological and aesthetic conditions."