The largest institutional shareholder in 99 Cents Only Stores, mutual fund giant Fidelity Management & Research Corp., has dramatically cut its stake in the struggling discount retailer.

FMR Corp., Fidelity's parent, reported in a filing with the Securities and Exchange Commission on Monday that its stake in 99 Cents Only had fallen to 1.2 percent, worth roughly $12 million. As recently as April 2004, Fidelity had a 12.5 percent stake (9 million shares) worth $230 million.

Shares of 99 Cents Only have fallen by half in the past year, to about $14.50 on Monday from the $30 range in January 2004. The drop was sharpest in June, when the company lowered earnings guidance and disclosed problems at its main Los Angeles warehouse.

Since its last filing in November, Fidelity has sold nearly 5 million shares. The mutual fund giant reported holding 817,599 shares on Monday, down from 5.7 million in November.

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