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Harbinger's Cablevision Sell-Off Goes On

2/21/2009 2:00 AM Eastern

Harbinger Capital, the hedge fund that caused a stir last year when it began buying large blocks of Cablevision Systems shares, continued a sell-off of the stock that began earlier this year, reducing its holdings in the Bethpage, N.Y.-based cable operator to 5%.

Harbinger, seen by many observers to be the main catalyst in Cablevision management's newfound openness with shareholders, said in a Securities and Exchange Commission filing last Tuesday that it had reduced its holdings in the cable operator to 11.7 million shares, or about 5% of its outstanding stock. That's down from the 7.5% interest Harbinger held in Cablevision in January and almost half the 9.1% interest the hedge fund controlled in September.

Last July, Cablevision CEO James Dolan announced during a third-quarter conference call with analysts that the company would look for ways to close the valuation gap in its stock, which many investors took to mean asset sales were imminent. That speculation, and moves by Cablevision to initiate a quarterly dividend, caused a huge run up in the stock in August. During that month, Cablevision shares rose as high as $32.56 per share (a 53% increase from its $21.25 price on July 30). Shares have fallen back to earth with the rest of the market as the banking crisis and recession have weighed heavily on stocks. On Tuesday, Cablevision shares were down 90 cents each (6.5%) to $13 apiece.

According to the SEC filing, Harbinger sold 3 million shares of Cablevision stock between Feb. 6 and Feb. 13 at prices ranging from $13.87 to $15.42 per share. In contrast, the hedge fund bought about 5.3 million shares in August at prices ranging from $29.81 per share to $31.79 per share.

This was the third time this year that Harbinger has revealed it reduced its Cablevision stake — earlier this month, the hedge fund reduced its 7.5% interest to 6.3%.

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