Hedge fund seeks board seats at New York Times Company

The New York Times and others are reporting that Alabama-based hedge fund gave notice Friday that it would try to elect directors to The New York Times Company board, the company said.

Evidently the hedge fund, Harbinger Capital Partners, a part of Harbert Management Corporation, controls less than 5 percent of Times Company stock, as there have been no S.E.C. filings indicating this level of investment. 

Haubert is led by Phillip Falcone. Falcone had a stellar year, raking in more than $1.3 Billion betting short on the mortgage meltdown, according to Bloomberg Hedge Fund Research, making him the seconbd highest-paid hedge fund manager in the nation, at over 1.3 billion dollars.

I have calculated a dividend yield of 6.20%, so Falcone can sell into rallies and buy into dips and push his aggregate return north of 20% pretty readily.

He probably made the board move at the Times just to shake things up a bit. Falcone's background is in high-yield debt. Harbinger is chartered as a distressed event special situations fund.

The company discloses that as of June 1, 2007, they managed in excess of $8.7 billion (USD) through two complementary strategies that focus on restructurings, turnarounds, liquidations, event-driven situations, capital structure arbitrage and short sales of securities. 

This purchase is probably considered an "event driven situation" where they purchase securities at an attractive price and try to time the investment to the probability of a specific event such as an exchange offer, emergence from or announcement of bankruptcy, earnings announcement, or outcome of creditor negotiations.

Undoubtedly, Falcone has a whole deck of cards up his sleeve. The permutations are endless.