Legg Mason Inc.'s largest shareholder has disposed of almost all of its stake in the Baltimore money manager, whose stock is trying to bounce back from one of its worst performances in two decades.
AXA, a Paris-based insurer and financial services company, and its subsidiaries reduced its Legg Mason holdings to 194,285 shares, or 0.15 percent, as of Dec. 31, according to documents filed yesterday with the Securities and Exchange Commission. That compares with nearly 11.8 million shares, or 8.9 percent, AXA and its affiliates held on Sept. 30, according to SEC filings.
Most of AXA's shares are held by AllianceBernstein, the New York-based investment management firm of the French insurer. John Meyers, a spokesman for AllianceBernstein, did not return messages yesterday.
Legg Mason listed AXA as its largest shareholder in proxy statements filed from 2005 to 2007. San Francisco-based asset manager Dodge & Cox is now Legg's largest shareholder, with 7.2 million shares, or 5.4 percent.
A Legg spokeswoman said the company does not comment on the actions of outside shareholders.
Shares of Legg declined 93 cents, or 1.3 percent, to close at $69.70 yesterday. Its stock fell 25 percent last year, on top of 21 percent in 2006 - the worst annual declines since 1987.
Andrew Richards, an equity analyst at Morningstar Inc. who does not own Legg stock, said investors should not read too much into AXA's action.
"It doesn't affect our fair value of the firm. We still think it's a good buy," Richards said. "Different people have different opinions on things, and they obviously thought there was a better opportunity elsewhere. It may not necessarily mean that they were anti-Legg, but that there's a better opportunity out there."
Legg Mason has had a challenging year with clients pulling out millions of dollars from the company's funds as well as its star managers producing weak returns compared with their peers.
Moreover, the company's net income for the fiscal third quarter dropped 11 percent because of a charge related to propping up money market funds invested in mortgage-related securities.
Legg last month appointed company insider Mark R. Fetting to replace Raymond "Chip" A. Mason as chief executive officer. Fetting has said one of his top initiatives would be to improve the company's slumping mutual funds and provide better service to clients.
Bloomberg News contributed to this article.