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Harbinger Lowers Its Cablevision Stake

1/31/2009 2:00 AM Eastern

Harbinger Capital, the hedge fund that began buying up Cablevision Systems stock last year and in many eyes prompted the company's newfound openness with shareholders, has been selling shares in the Bethpage, N.Y.-based MSO over the past two months, dropping its stake from 9.1% to 7.5% in December and January.

According to a filing with the Securities and Exchange Commission last Wednesday, Harbinger funds owned a total of 17.5 million shares of Cablevision stock, or about 7.5% of total shares outstanding. That is down from the 21.4 million shares (9.1% of outstanding) the hedge fund said it owned in September.

Harbinger, led by Philip Falcone, has been an outspoken activist investor and has in the past called for management shakeups at The New York Times Co. and Media General, two of its other substantial holdings.

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. Cablevision stock was up 98 cents each (6%) to $17.35 per share on Jan. 28.

It appears that Harbinger took a big hit on the Cablevision sale. According to the SEC filing, Harbinger sold about 4 million shares for prices between $14.30 and $17.07 per share. In contrast, the hedge fund bought about 5.28 million shares in August at prices ranging from $29.81 to $31.79 per share.

September