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February 15, 2008, 11:42 am
Lampert cutting losses on Citi
Hedge fund manager Ed Lampert is cutting his losses on Citi (C). Lampert is best known for providing his investors with 20 percent-plus annualized returns since 1988, and for his efforts to turn around retailer Sears (SHLD) through a 2005 merger with Kmart. But 2007 wasn’t a good year for him - as shown by the action in Citi, where Lampert appears to have spent the year buying high and selling low.
Lampert cut his stake in Citi by 31 percent in the fourth quarter ended Dec. 31, according to a Securities and Exchange Commission filing. He held 19.1 million shares in the financial giant at year-end, down from 27.8 million shares in September. What’s more, Lampert made his sales during a quarter in which Citi’s shares were falling sharply, spending most of the period below the prices at which Lampert made his earlier purchases.
Before the latest quarter’s stock sales, Lampert had spent more than a year accumulating shares of Citi. He began buying the stock back in 2006, when Citi shares traded between $44 and $57, and continued his purchases through the first three quarters of last year, when Citi ranged between $44 and $56. During the summer of 2007, before the subprime mortgage crisis hammered stocks across the financial sector, Lampert’s stake was worth as much as $1.3 billion. Given Lampert’s track record, it’s no surprise that his foray into Citi had some observers applauding his prescience.
But Citi shares lost more than a third of their value during the fourth quarter alone, as CEO Chuck Prince departed after Citi admitted it would have to take a multibillion-dollar writedown of mortgage-related securities. The shares fell to just over $29 in December from $45 earlier in the quarter. By year-end, Lampert’s Citi scaled-down holdings were worth just $561 million, filings show - a fraction of their peak worth.
It’s impossible to know whether Lampert has been buying or selling Citi shares this year, but so far 2008 is shaping up as another rough one. Five of his fund’s six holdings at Dec. 31 are down for the year, with Citi down 12 percent, AutoZone (AZO) down 6 percent, AutoNation (AN) down 4 percent, Sears off 3 percent and Home Depot (HD) down 1 percent. Only marketing services firm Acxiom (ACXM), Lampert’s smallest holding at Dec. 31, is up, with a 9 percent gain. Lampert’s showing is in line with the broad stock market declines so far this year, but that surely can’t make his investors any less antsy.
Lampert cutting losses on Citi
Hedge fund manager Ed Lampert is cutting his losses on Citi (C). Lampert is best known for providing his investors with 20 percent-plus annualized returns since 1988, and for his efforts to turn around retailer Sears (SHLD) through a 2005 merger with Kmart. But 2007 wasn’t a good year for him - as shown by the action in Citi, where Lampert appears to have spent the year buying high and selling low.
Lampert cut his stake in Citi by 31 percent in the fourth quarter ended Dec. 31, according to a Securities and Exchange Commission filing. He held 19.1 million shares in the financial giant at year-end, down from 27.8 million shares in September. What’s more, Lampert made his sales during a quarter in which Citi’s shares were falling sharply, spending most of the period below the prices at which Lampert made his earlier purchases.
Before the latest quarter’s stock sales, Lampert had spent more than a year accumulating shares of Citi. He began buying the stock back in 2006, when Citi shares traded between $44 and $57, and continued his purchases through the first three quarters of last year, when Citi ranged between $44 and $56. During the summer of 2007, before the subprime mortgage crisis hammered stocks across the financial sector, Lampert’s stake was worth as much as $1.3 billion. Given Lampert’s track record, it’s no surprise that his foray into Citi had some observers applauding his prescience.
But Citi shares lost more than a third of their value during the fourth quarter alone, as CEO Chuck Prince departed after Citi admitted it would have to take a multibillion-dollar writedown of mortgage-related securities. The shares fell to just over $29 in December from $45 earlier in the quarter. By year-end, Lampert’s Citi scaled-down holdings were worth just $561 million, filings show - a fraction of their peak worth.
It’s impossible to know whether Lampert has been buying or selling Citi shares this year, but so far 2008 is shaping up as another rough one. Five of his fund’s six holdings at Dec. 31 are down for the year, with Citi down 12 percent, AutoZone (AZO) down 6 percent, AutoNation (AN) down 4 percent, Sears off 3 percent and Home Depot (HD) down 1 percent. Only marketing services firm Acxiom (ACXM), Lampert’s smallest holding at Dec. 31, is up, with a 9 percent gain. Lampert’s showing is in line with the broad stock market declines so far this year, but that surely can’t make his investors any less antsy.