SAC Capital Takes 5% Stake in Crocs After Blackstone's Bet

NEW YORK (TheStreet) -- Embattled hedge fund SAC Capital Advisors has disclosed a 5% stake in footwear manufacturer Crocs (CROX) just over a day after The Blackstone Group (BX) said it would invest $200 million in a convertible preferred stock offering that will allow the company to replace its CEO and buy back $350 million in stock.

SAC Capital management said in a filing with the Securities and Exchange Commission on Tuesday it had accumulated a 5% passive stake in Crocs. As of the third quarter, SAC held a 1.95% stake in the niche footwear brand. It couldn't immediately be discerned whether SAC had increased its Crocs stake before or after the Blackstone announcement.

Firms holding 5% or more of a company's shares are required by the SEC to disclose their holding. However, they have a window to make the disclosure. Jonathan Gasthalter, a SAC Capital spokesperson, declined to comment.

It has been a rough year for SAC, which included a guilty plea by the hedge fund on multiple counts of securities fraud, an SEC order against the fund's founder Steven A. Cohen and, most recently, the criminal conviction of Michael Steinberg, once one of SAC's top portfolio managers, on multiple counts of fraud. 

A stake in Crocs may seek to benefit from Blackstone's recently announced investment, as SAC closes to outside investors and operates as a so-called family office to manage Cohen's wealth.

Blackstone Group said on Sunday it would invest $200 million in Crocs' convertible preferred stock, as the company works to replace its CEO John McCarvel and buy back $350 million in the company's common shares. The preferred stake will carry a 6% cash dividend and is convertible to stock at $14.50 a share. Blackstone will also gain two seats to Crocs board of directors.

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