market folly

Jonathan Auerbach's hedge fund Hound Partners has filed a Form 4 and an amended 13D with the SEC regarding shares of Avantair (AAIR). In the filings, we see that Hound was merely re-shuffling their portfolio between their related investment vehicle entities. However, it did give us a glance as to their position sizing of a position they already held. Hound Partners now shows a 13.66% stake in Avantair with 3,977,714 shares. This means they practically kept their stake unchanged as they've only sold 3,846 shares since October 2009 when we saw their last disclosure regarding this position.

Their current stake includes 2,797,274 shares that may be acquired upon conversion of Series A convertible preferred stock into common stock. Those shares have a conversion price of $3.574909 and each share of Series A preferred can be converted into 27.973 shares of common. In terms of other recent activity out of this hedge fund we also updated you in April that Hound Partners disclosed two positions.

Hound is a New York based firm that Auerbach started with assistance from legendary hedgie Julian Robertson. He is one of the many 'Tiger Seeds' that Robertson has seeded in an attempt to sprout up talented new investment managers. Auerbach of course previously worked for Robertson at legendary hedge fund Tiger Management.

Taken from Google Finance, Avantair is "engaged in the sale of fractional ownership interests and charter card usage of professionally piloted aircraft for personal and business use and the management of its aircraft fleet. As of June 30, 2009, the Company operated 52 aircraft within its fleet, which is comprised of 46 aircraft for fractional ownership, five company- owned core aircraft and one leased and company- managed aircraft."

For more from Jonathan Auerbach's firm, you can view our previous coverage of Hound Partners portfolio.