Would it have been nice to visit Channing and Jonah on the set of the third installment? Sure. Did a small part of him want to direct? Yes. Did he feel he could’ve brought a Queens school-yard authenticity to things? You betcha. But these are not the things that keep him up at night.

When it came to Lions Gate Entertainment Corp. and MGM Holdings Inc., Carl Icahn yelled “cut” too early. Box-office hits including “The Hunger Games,” “The Hobbit” and “22 Jump Street” have revived the once-struggling movie studios, rewarding a handful of hedge funds with billions in paper profits. But Mr. Icahn sold shares of the companies before the rallies, missing a chance to score about $2 billion in gains. One of the funds even bought its stake directly from the activist investor. Shares in Lions Gate and MGM Holdings have more than tripled since 2012, thanks to a series of blockbuster films, even as competitors have focused more on stable, faster-growing television businesses. The hits have delivered big gains and newfound Hollywood clout to a handful of funds, including Anchorage Capital Group LLC and MHR Fund Management LLC. Anchorage Chief Executive Kevin Ulrich has made appearances at Hollywood premieres over the past year. MHR founder Mark Rachesky, now Lions Gate’s chairman, once worked for Mr. Icahn.

The 78-year-old investor says he isn’t losing much sleep over the missed opportunities. Mr. Icahn has recorded recent winning investments in Netflix Inc., Apple Inc., Forest Laboratories Inc. and Family Dollar Stores Inc., among other stocks. His publicly traded Icahn Enterprises LP has seen annualized gains of 21.5% since 2000, according to public records, compared with an annualized gain of more than 4% for the S&P 500 stock index, including dividends. “I often sell too soon,” Mr. Icahn said. “But like in the song ‘Mañana,’ my record is good enough for me.”

Blockbuster Movies Fuel Big Wins for Hedge-Fund Investors [WSJ]

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