Further Selling By Activist Holder Pushes Conseco Lower Again

In May 2008, when the Steel Partners hedge fund run by activist investor Warren Lichtenstein initially expressed its interest in taking a commanding stake in insurer Conseco (CNO) the stock commanded about $12 a share.

Now, with Steel Partners in ”sell” mode, it’s taken the same kind of haircut that Conseco’s other investors have absorbed. The kind of losses that Lichtenstein presumably figured the company could avoid if it just listened to his efforts to bolster its standing.

Steel Partners sold some 2.74 million shares of Conseco stock in late June at prices worth just below or just above $2 a share, meaning that it took a roughly 80% discount to what it likely paid when it started to amp its position in spring of last year. At one point, Steel Partners expressed the ambition to build a stake equal to about 22% of Conseco. It still holds about 13 million shares of the stock, equal to about 7% of the outstanding common, even after last month’s sale.

Absent the support of Steel Partners investment, the stock has traded another 7% lower in Monday’s action.

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