Big fund firms among top holders in sinking stocks

Reuters ^ | 09/10/08 | Svea Herbst-Bayliss

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Big fund firms among top holders in sinking stocks

By Svea Herbst-Bayliss

Wed Sep 10, 5:19 PM ET

Some of America's biggest and best-known mutual fund companies likely suffered heavy losses multiple times this week because they had large holdings in the market's worst performing stocks.

AllianceBernstein Holding LP (AB.N), which invests $675 billion, may have been the biggest casualty. It ranked as the top shareholder in ailing investment bank Lehman Brothers Holdings Inc (LEH.N), where it owned 65.6 million shares, and crippled mortgage company Fannie Mae (FNM.N), where it owned 134.2 million shares, at the end of June.

At Fannie's cousin Freddie Mac (FRE.N), AllianceBernstein was the third biggest holder with 41 million shares.

On Tuesday, Lehman's stock tumbled 46 percent, while Fannie Mae cratered 90 percent, and Freddie Mac plunged 85 percent on Monday. While the companies' share prices have recovered somewhat, losses remain enormous overall, with Fannie having given up early all of its value in the last 52 weeks, for example.

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And hedge fund manager George Soros could have lost as much as $84.7 million this week alone if he still owns the 9.47 million shares of Lehman he bought in the second quarter.

Bloomberg reports that his loss is actually $120m.

Link: http://www.nysun.com/business/soros-fund-loss-on-lehman-may-be-120m/85619/

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Ping!

[AndyJackson]

because they had large holdings in the market's worst performing stocks

I would like to point out that this is actually a tautology. A stock can only perform really badly and cause a lot of people to lose a lot of money if it is a widely held big cap stock that has been bid way above any real value. IOW in order to lose lots of money someone had to put in lots of money in the first place. If no one had significant losses it could only have been that no one held the stock.

And the other part of this is that the vast majorit of shareholders cannot dump a stock before it declines in value - because there have to be buyers, and massive selling would only cause the price to decline earlier than it actually did.