Thank You, Senor Slim! Harbinger's NYT Bet Paying Off Big

Fitz: If Mexican billionaire Carlos Slim Helu's surprise purchase of a 6.4% stake in The New York Times Co. is setting off alarm bells inside the Gray Lady's gleaming new headquarters, you can be sure they're breaking out the Champagne at Harbinger Capital Partners, Jen.

As we reported through the month of August, Harbinger has made a series of big bets that Times Co. stock (NYSE: NYT) will start moving up. In 11 deals between Aug. 5 and Aug. 29 Harbinger entered into equity swaps with an undisclosed third party. This is kind of like fantasy football, with Harbinger and the other party pretending to take stakes in NYT stock at particular prices. If the stock goes up, Harbinger collects the difference; if it goes down it pays out the difference.

Well, Slim's own skin-in-the-game  bet has NYT soaring. The stock closed  at $13.96 Wednesday, when Slim made his surprise disclosure to the Securities and Exchange Commission after markets closed. At 11 a.m. today, Friday, NYT was trading at $15.80.

By my calculation, that means Harbinger's  bets -- made when the stock was  trading between $12.84 and  $13.90 a share -- would pay off at $4,603,047.

As we've noted, too, Harbinger can call off the equity swap any time it wants. If it were me, I'd be on the phone now. But that's probably explains the difference between me and Master of the Universe types like the Harbinger hedgers.

Comments

[Pitchfork Pat]

I'm sure the good folks at Harbinger had NO idea that Helu was going to make a move. So Harbinger makes a little money on a "Bet", and everyone should pop a cork? Anything not driven by earnings or, at the very least, an improved outlook on print ad spend means nothing to the average Joe.