Box-office hits including “The Hunger Games,” “The Hobbit” and “22 Jump Street” have revived the once-struggling movie studios, rewarding a handful of hedge funds with billions in paper profits.
But Mr. Icahn sold shares of the companies before the rallies, missing a chance to score about $2 billion in gains. One of the funds even bought its stake directly from the activist investor.
Shares in Lions Gate and MGM Holdings have more than tripled since 2012, thanks to a series of blockbuster films, even as competitors have focused more on stable, faster-growing television businesses.
The hits have delivered big gains and newfound Hollywood clout to a handful of funds, including Anchorage Capital Group LLC and MHR Fund Management LLC. Anchorage Chief Executive Kevin Ulrich has made appearances at Hollywood premieres over the past year. MHR founder Mark Rachesky, now Lions Gate’s chairman, once worked for Mr. Icahn.
Mr. Icahn, who conducted a bitter multiyear battle with Lions Gate that ended in 2011, made more than $600 million from the studio investments. But he sold his stakes well before both shares reached their recent heights…
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