Tags: analogies, David Einhorn, FSA, fucking Brits, Greenlight Capital, Punch Taverns, this one goes out to you asshole cop who gave me a $200 ticket over Memorial Day weekend!
…about all this. For starters:
- “This is as much like insider trading as soccer is like football”
- “The FSA has spent the last two years forcing square pegs into round holes”
- “This is like a traffic cop with a quota at the end of the month, with a miscalibrated radar gun”
- Greenlight has a recording of the call in question, which contains no evidence of insider trading Read more »
Tags: David Einhorn, Greenlight Capital, insider-trading, Punch Taverns
Remember how insider trading is trading on material nonpublic information? Only how it’s not? Apparently it is in England! Someone found that out today.
I know, I’m soft on insider trading but hear me out. This is actually kind of screwed up.
First, a story. I used to work in a business that raised money for companies. Often when companies needed to raise money it was to do things like stave off rapidly impending doom, and the company would come to its bankers and ask “so, um, how’s that story going to play in the market?” And you’d answer something like “I don’t know but probably shitty?” And a way to make everyone feel better was a wall-crossed deal, in which the bank calls a few big potential buyers and says “would you buy this thing? at what price?” with the goal being to get the deal mostly done without freaking out the market – or, if that failed, to cancel the deal and move on to plan B also without freaking out the market.
Now in order to do this you needed to “wall cross” the potential investors by getting them to agree not to talk about the offering, or trade in the company’s stock, until the offering became public or was abandoned. Why? Two reasons:
(1) A thing called Regulation FD makes it illegal for companies to tell some investors material things unless they either disclose it to everyone or get the investors to agree to keep it confidential and not trade on it.
(2) Also important! You did this whole wall-cross to avoid announcing your deal and freaking everybody out so they sell your stock. If you don’t get investors to agree not to trade, then they’ll probably sell your stock, so you’ve accomplished nothing except breaking the law a bit.
Now getting them to agree not to trade has a certain chicken-and-egg quality because getting a call from a bank saying “we need to lock you up on company X” is never a good sign (maybe rare exceptions). So the call would go like this: Read more »
Tags: David Einhorn, David Einhorn doesn't have time for your bull shit, FSA, Greenlight Capital, halfhearted fines, insider-trading, Punch Taverns
According to the FSA, which imposed the £7.2 million fine for “inadvertently engaging in market abuse in connection with trading of Punch Taverns…the market abuse was not deliberate or reckless. Mr. Einhorn did not believe that the information that he had received was inside information and he did not intend to commit market abuse.” Sayeth Einhorn: Read more »
Tags: Coffee, David Einhorn, GAAP-uchino, Green Mountain Coffee, Greenlight Capital, shorts, words that have exited Green Mountain execs' mouths: "We are the iPod of coffee"
If you’re jammed and don’t have time for that, just skip to the last slide to check out David Einhorn’s breathtaking foam artistry:
Otherwise, proceed. Read more »
Tags: all in all not bad for 18 months of "work", David Einhorn, hard work, letters to investors, loans that were secured by portable toilets and bowling balls, portable toilets, real estate, she works hard for the money, SJB Escrow Corp, Stephen Ross
Real-estate developer Stephen Ross and his partners spent more than a year digging into U.S. banks, including more than 100 with loans to local bakeries, gas stations and amusement parks. They hoped to spend about $1.1 billion buying or investing in lenders. But the deeper they went, the worse things looked. As a result, Related Cos., the New York firm in which Mr. Ross is chief executive, gave back the money it raised from roughly 150 investors, including hedge-fund manager David Einhorn. The firm did find several investments it was interested in but was outbid. In a prospectus, SJB had told potential investors: “We believe the environment presents a significant opportunity for SJB to consummate an attractive acquisition of one or more institutions, whereas the current weakness in the banking sector and a potential long duration of any recovery create a favorable long-term environment to build a successful commercial bank.” Terms of the pool required SJB to invest the money within 18 months [but]…with the clock ticking on its 18-month deadline, Messrs. Ross, Blau and Beal sent a letter to investors Aug. 18 informing them that the fund would be liquidated. Investors received roughly 97 cents on the dollar after expenses. Mr. Blau, Related’s president, had led the effort to find potential investments for the fund [and] in many cases, didn’t liked what he saw, including loans that were secured by portable toilets and bowling balls. “It was a lot of work, and it was hard to make the numbers work,” he said. [WSJ]