market folly

In a 13G filing just filed with the SEC late yesterday, Philip Falcone's hedge fund Harbinger Capital Partners has disclosed an 8% ownership stake in Morgans Hotel Group (MHGC). The filing was made due to activity on June 24th, 2009 and they now own 2,584,726 shares. This is a brand new position for them, as they previously did not hold it when we last looked at Harbinger's portfolio.

In addition to this recent movement, Harbinger has also been selling a lot of shares of Solutia (SOA). It appears that Harbinger is re-tooling and realigning their portfolio and strategy as they also picked up a new position in Zapata (ZAP). Harbinger ranked #1 in the top 10 asset losers, losing 60.8% on a year over year basis as their Offshore fund finished -22.7% for 2008. Also, we got word that Falcone would be returning to his roots in terms of investing style and would be opening a new fund. We'll continue to monitor the developments regarding their holdings.

Taken from Google Finance, Morgans Hotel Group is "an integrated hospitality company that operates, owns, acquires, develops and redevelops boutique hotels primarily in gateway cities and select resort markets in the United States, Europe and in select international locations. As of December 31, 2008, the Company owned or partially owned, and managed a portfolio of 12 luxury hotel properties in New York, Miami, Los Angeles, Scottsdale, San Francisco, London and Las Vegas, comprising approximately 3,700 rooms. In addition, it has two hotel developments, in Boston and New York, and a hotel expansion in Las Vegas representing an estimated 1,300 additional guest rooms."