This article was published in the December issue of Money magazine.
The world of hedge funds may be shrouded in secrecy. But savvy investors can profit handsomely by following the public moves of some of the industry’s high-profile players, especially as many are taking a more active role in cleaning up troubled companies.
In July 2011, Carl Icahn, one of the most famous “agitator” investors, put pressure on cellphone maker Motorola Mobility to do something with its lucrative patent portfolio. A month later Motorola sold out to Google (GOOG) for a 63% premium.
Last spring, hedge fund manager Dan Loeb of Third Point was instrumental in the ouster of Yahoo CEO Scott Thompson after Loeb found inaccuracies in Thompson’s résumé. Shares of the online media company (YHOO) are up 15% since Loeb (now a Yahoo board member) disclosed Third Point’s stake in fall 2011.
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