Not really enough to get upset or even mildly perturbed over, though in a letter to investors today re: the Chinese company, Paulson did note that “as the largest investors in the Paulson Advantage strategy,” the disappointment in the lack of trees is shared by the Paulson partners.
According to the letter, Paulson’s initial interest in the firm followed a January 2007 news report that CVC Asia Pacific and Macquarie Bank were considering a bid for Sino-Forest. Paulson began researching the company and started building a position after news that Sino-Forest’s potential acquirers would not be bidding sent its stock price down. Then, in March 2007, after Sino-Forest sold a 16% stake of its stock to an investment group led by Temasek, Singapore’s sovereign wealth fund, Paulson & Co. decided the Chinese company’s stock was undervalued and suggested to the company that it move its stock listing from Toronto to Hong Kong or Shanghai to improve its valuation.
“As a passive investor in public companies, Paulson has access to the same information that everyone else in the securities market does. Like other public market investors, we must rely on audits and underwriter due diligence for comfort that financial statement and disclosures are accurate and reflect the true state of affairs at companies with publicly traded securities,” said Paulson’s letter, noting that the firm conducted extensive due diligence on its investment. Additionally, the firm cited several legal and institutional controls that Sino-Forest had passed. Among them: financial and legal auditing by the Toronto Stock Exchange beginning in 1995; financial statements approved by such auditors as Ernst & Young; eight separate securities offerings between 2004 and 2010 and a large following by sell-side research analysts and ratings agencies. Though Paulson stopped short of denouncing Sino-Forest’s accounting, the firm attributed its decision to unload its [full] position in Sino-Forest to what it believes is irreparable damage to the company’s stock from a June 2 report from Muddy Waters Research that questioned the company’s public disclosures and financial statements.
And while the firm appears to have done the rational, level-headed thing in selling the position, it appears that some emotion is still at play, as apparently someone is not yet ready to let go, move on and never look back.
“As the largest investors in the Paulson Advantage strategy, the Paulson partners share your disappointment in this outcome,” said the letter. “We will continue to monitor the Sino-Forest situation.”
That’s okay John, I have had some time away from the field to reflect on the economy & financial markets. In light of this, I started a new fund. It has a target rate of return of 30%. Get in touch soon.
-B. Madoff
dear john,
only a sucker plays merger arbitrage trading on market rumors. get better info sources.
cosigned,
Raj R and Ivan Boesky
Pff, 107m? That’s nothing. That hardly covers the $100 bill-printed toilet paper used at Paulson & Co. To put that into perspective, that’s a mere 2% of his take home pay last year.
Paulson = One trick pony
~ Phil
never get involved in a land war in Asia
Pic 1 – “What do you mean no trees?”
Pic 2 – “I should have known those Chinese bastards would fuck me!”
Pic 3 – “Mellow Johnny, mellow… you’re still a billionaire with a sweet ass coat.”
thanks, for pointing out that which was pointed out in the first line of the post.
Dear John,
If you are so disappointed and concerned are you willing to take 20% of the losses on this one like you do on the gains?
-Paulson Investor who puts a price on disappointment
Are you invested in some weird sort of hybrid fund where gains and losses are not netting? Go back to TMZ.
Every portfolio is going to have a bad apple or two
1. It’s 107M in the Paulson Advantage fund, not for Paulson & Co in total.
2. If he’s down 20% and Sino only cost him about 130bps, he’s having an even shittier month in his other holdings
3. Schadenfreude and a quarter still leave me $10B poorer than him
I’ve heard the fund is also exposed to SINOFO bonds. Those have taken quite a beating as well, though not as severe as the stock…
$107 million? Cue the SEC!
Canada is the Boston of the Northern Hemisphere.
In Soviet Russia, funeral kills you.
http://www.dailymail.co.uk/news/article-2007356/Shocked-woman-dies-funeral-heart-attack.html?ito=feeds-newsxml
$107MM? I sometimes find that in the lint trap in my dryer.
–Warren Buffet
Want to trade wood for sheep?
-guy playing settlers of catan
Hi, thank you for pointing out that it’s an insignificant loss, something that the first line of the post definitely did not do (kidding, that’s exactly what it did).
smoke trees
Would have been thumbed except for spelling error. Where are kids being educated these days?
Silly Texashedge. Apple is not a common plantation tree.
- RBC Dominion equity research quant
His quants are busy figuring out how the EFFF the American taxpayers on another bailout as this is written. Chump change to a elite ruller like Johnny boy!
I think….the 107 mio loss is for the trade since 2007 (stock was at $ 7 then) . This does not take into account the loss on the position since 2011 (stock was $23 in Jan )…
“As a passive investor in public companies” .. what are you now .. a fucking ETF
SYHzVq Great blog.Really looking forward to read more. Cool.