Lifelock Inc (LOCK) Faces FTC Action For Violating 2010 Order: Hedge Funds Got It Wrong

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How have hedgies been trading Lifelock Inc (NYSE:LOCK)?

According to Insider Monkey’s hedge fund database, Okumus Fund Management, managed by Ahmet Okumus, holds the most valuable position in Lifelock Inc (NYSE:LOCK). Okumus Fund Management has around 5.1 million shares valued at $73.3 million at the end of March, comprising 16% of its 13F portfolio. The second-most bullish hedge fund manager is Ken Griffin of Citadel Investment Group, with around 1.9 million shares; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions consist of Seymour Sy Kaufman and Michael Stark’s Crosslink Capital, Israel Englander‘s Millennium Management, and Glenn Russell Dubin’s Highbridge Capital Management.

Though the number of hedge funds holding positions in the stock was reduced by one, the overall investment by these hedge funds went up by 24% during the January – March period. This indicates that some hedge fund managers opted to pour a lot of money into the stock during the first three months, but that a few others opted to stay out of it.  Intriguingly, Bain Capital’s Brookside Capital dropped the largest investment in the stock, offloading all its 1.6 million shares during the first quarter, while Eric Bannasch of Cadian Capital was right behind this move, as the fund dumped around 320,000 shares. On the contrary, Okumus Fund Management purchased around 4.8 million shares of the company and Ken Griffin also purchased an additional 300,000 shares of the company during the first trimester.

Overall, hedge fund managers were optimistic on Lifelock Inc (NYSE:LOCK) and opted to pour a lot of money into the stock during the first trimester. Considering the latest FTC action, analysts’ downgrades and stock drop, it was not a wise decision from hedge fund managers to invest in Lifelock Inc (NYSE:LOCK). Hedge fund activity on the stock during the second quarter might reveal more details on if they were in fact expecting this dip in the stock. Insider activity on the stock indicated that many top executives sold their shares in the last two months; a clear indication that something might happen. We recommend to avoid the stock at the moment, considering the uncertainties surrounding it.

Disclosure: None

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