Lone Pine, Corvex Each Lose $250 Million in One Day on Williams

  • Williams stock slumped 35% Monday; Chesapeake declined 33%
  • Icahn, Southeastern and Harris lose millions on Chesapeake

Hedge funds Lone Pine Capital LLC and Corvex Management, among the biggest shareholders in pipeline operator Williams Cos, each lost about $250 million Monday as the stock slumped along with natural gas producer Chesapeake Energy Corp.

Williams declined 35 percent, the most since 2002, amid concern a planned deal isn’t going through. Lone Pine, run by Stephen Mandel Jr., and Corvex, an activist hedge fund run by Keith Meister, each own about 42 million shares, according to the latest available data compiled by Bloomberg.

Williams slid after Energy Transfer Equity LP, the pipeline conglomerate planning to buy the company, announced it replaced its chief financial officer amid investor concern that the deal is in trouble. Williams also plunged after a report said Chesapeake hired restructuring attorneys, something the company denied.

Chesapeake Energy fell 33 percent, the most since 1993, amid concern that the U.S. natural gas driller was running out of financial options. Chesapeake has sought to lighten a debt load that is eight times larger than its market value, by canceling drilling projects, cutting its workforce and closing offices. It is the latest shale driller hurt by an oversupply of gas and crude.

Activist investor Carl Icahn, the second-largest Chesapeake shareholder and leader of the 2013 investor revolt that deposed co-founder Aubrey McClendon, lost $75 million on the value of his holdings in the company Monday. Southeastern Asset Management, the third largest shareholder, lost about $59 million, and Harris Associates lost about $45 million.

Icahn wasn’t immediately available to comment, according to a spokesperson. Patrick Clifford, a spokesman for Lone Pine at Abernathy MacGregor, declined to comment. Meister, Southeastern and Harris Associates didn’t immediately respond to a request for comment.

The calculations of all the losses assume the stakes haven’t changed since the latest filings.

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