Christian Leone’s Luxor Capital Group disclosed yesterday a new position in Eclipse Resources Corp (NYSE:ECR). According to a Schedule 13G form filed with the SEC, Luxor Capital Group may be deemed beneficial ownership of 8.37 million shares of Common Stock, which represent 5.2% of the company’s shares outstanding.
Luxor Capital Group is a New York-based hedge fund founded by Christian Leone in 2002, and managed by him ever since. Aside from using a value-based approach when choosing its stocks, Leone’s Luxor Capital also has a penchant for distressed companies. The fund has an equity portfolio worth more than $5 billion, focused on finance (46.9%) and consumer discretionary (31.6%) stocks.
Eclipse Resources Corp (NYSE:ECR) is a $1.84 billion market cap independent exploration and production company engaged in the acquisition and development of oil and natural gas properties in the Appalachian Basin. The company went public on mid-June. A total of 30.3 million shares of Common Stock were sold at a price to the public of $27.00 per share; the company sold 21.5 million shares, while certain selling stockholders named in the registration statement sold 8.8 million shares. The proceeds (roughly $545.2 million) will be used to repay all outstanding borrowings under its revolving credit facility and to fund a portion of its capital expenditure plan.
However, since the IPO, and in spite of several positive ratings (from firms like Barclays and Jefferies), the stock price is down by more than 53%. Eclipse Resources Corp (NYSE:ECR) currently trades at $11.82 per share.
On top of Luxor Capital Group, other major institutional investors betting on Eclipse Resources Corp (NYSE:ECR) are Brian Taylor’s Pine River Capital Management, which disclosed ownership of 1.01 million shares by the end of the second quarter of 2014, Anand Parekh’s Alyeska Investment Group, with 321,310 shares (as of June 30, as well), and Richard Driehaus’ Driehaus Capital, with 24,907 shares.
Over the past month, Luxor Capital Group has been quite active. The fund has been raising its exposure to Altisource Asset Management Corp (NYSEMKT:AAMC) and to CONN’S, Inc. (NASDAQ:CONN), in which it holds a 20.9% activist stake.
Moreover, its top equity position, The Madison Square Garden Co (NASDAQ:MSG), has returned about 26.7% year-to-date, compared to the S&P 500’s Index 7.36% upsurge. So, trailing Luxor might not be a bad idea.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
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