Two Hedge Funds Taking A Hit From Yahoo!'s Fall, But Still Gaining YTD

It seems like Alibaba Group Holding Ltd's BABA price fall also took a toll on Yahoo! Inc. YHOO, which lost about 1.6 percent December 23. Nonetheless, Yahoo's overall performance for 2014 was quite good, returning more than 24 percent year-to-date compared to the Dow Jones’ 8.8 percent.

D.E. Shaw

The famed hedge fund started 2014 with 10.48 million shares and almost doubled its stake over the first three quarters of the year. The stock traded at relatively low prices, usually below $43 compared to the current $50.30. Its current position, which comprised 19.56 million shares by the end of Q3, has gained about 24 percent since the end of the period.

However, the wage lost about $160 million in market value December 23, making it the most affected hedge fund.

Starboard Value LP

Starboard Value LP was another big winner with Yahoo. The fund initiated a position with 7.72 million shares over Q3, while the stock price was still below $43. Starboard Value has already seen about a 24 percent return.

According to several Wall Street analyst firms, there’s still plenty of upside for Starboard, D.E. Shaw and other investors to benefit. Bank of America recently upgraded the stock from a Neutral to a Buy rating, setting a price target of $62, while Bernstein and UBS fixed price targets of $60 and $58, respectively.