Elliot Management cashes in its shares

Following the pattern it has shown in previous investment actions, the investment firm that last winter turned Cabela's and Sidney’s world upside down has taken the money and run.

In a Securities and Exchange Commission (SEC) filing, New York hedge fund Elliot Management has sold more the half of it's six million Cabela's shares.

A “hedge fund” is defined as a limited partnership of investors that use high risk methods in hopes of realizing large capital gains.

Elliot Management serves as the management affiliate of American hedge funds flagship Elliott Associates L.P. and Elliott International Limited, started in 1977 by Paul Singer.

Elliott Management disclosed an 9.3 percent stake in Cabela’s last year, with an option to obtain up 11 percent, saying in a regulatory filing that it would seek to engage the company’s board in strategic discussions including a possible sale.

In a press release announcing Cabela's acquisition by Bass Pro Cabela’s Chief Executive Officer Tommy Millner mentioned such strategic reviews.

"Cabela’s is pleased to have found the ideal partner in Bass Pro Shops, having undertaken a thorough strategic review, during which we assessed a wide variety of options to maximize value, the Board unanimously concluded that this combination with Bass Pro Shops is the best path forward for Cabela’s, its shareholders, outfitters and customers. In addition to providing significant immediate value to our shareholders, this partnership provides a unique platform from which our brand will be extremely well positioned to continue to serve outdoor enthusiasts worldwide for generations to come."

Following the announcement of the buy out, Elliot Management is now cashing in it's chips and profiting from it.

According to an SEC filing by Elliot Associates L. P., Elliot Associates and Elliot International L.P. collectively sold 3,456,000 common stock shares between Oct. 4 and Oct. 5. The price per share ranged from $62.95 to $63.38, with profits reported to be more than $50 million.

Elliott purchased Cabela’s shares for around $38.50 each, on average. It owned approximately $233 million worth of shares at that price. The company sold more than half of them this week after the sale was announced.

Section 16 of the 1934 Act requires a public company’s officers, directors and holders of more than 10 percent of any class of equity security to report their transactions in such company’s securities and to disgorge certain “short-swing profits.” Because Elliott’s stake in Cabela’s is now less than five percent it no longer is required to report to federal regulators when it buys or sells stock.