Maybe it’s investment as performance art? Hedge fund titan Steven Cohen, head of insider trading hotbed SAC Capital, has increased his stake in troubled game maker Zynga (ZNGA) to more than 5 percent, according to a company filing, more than double the 2.2 percent he held at the end of 2013.
Zynga makes FarmVille, Words With Friends, Draw Something, and other social games. The company has had a rough time since going public at the end of 2011, including multiple rounds of layoffs, ill-considered acquisitions, and a soured relationship with Facebook (FB). Hedge funds own almost 58 percent of Zynga shares, according to Bloomberg data, up from 27 percent one year ago.
While Cohen is famous for buying and selling stocks rapidly, SAC Capital does have some large and seemingly miscellaneous holdings, including 8.8 percent of Clearwater Paper (CLW), 4.87 percent of Trulia (TRLA), and 4.71 percent of Crocs (CROX).
At $4.49, shares of Zynga have lost 69.7 percent since their high on March 2, 2012. This year the shares have gained 16.8 percent, owing largely to a $527 million purchase of mobile game developer NaturalMotion in January, which the company announced alongside a new round of layoffs. More analysts rate Zynga a sell than a buy, according to Bloomberg data.
Cohen’s hedge fund asked a federal judge on Thursday to approve its $1.8 billion insider trading settlement with the government, saying it was “deeply remorseful” for a sustained pattern of illegal activity by its employees. Six former employees have pleaded guilty to insider trading; two more, Michael Steinberg and Mathew Martoma, were found guilty at trial in recent months. As part of its deal with the government, SAC has agreed to stop managing outside investors’ money.
SAC, which is changing its name to Point72 Asset Management, will continue as a “family office” managing Cohen’s personal fortune. Cohen is worth $8.7 billion, and has amassed one of the world’s better collections of contemporary art, including a dead shark in a tank of formaldehyde, a human head sculpted out of the artist’s own frozen blood, and some paintings. Valued at $173 million, the Zynga stake is not much more than the $155 million Cohen paid one year ago for Le Rêve, a 1932 oil painting by Pablo Picasso.