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from Global Markets Forum Dashboard:

Activist investors don’t wait for red to sell

Stocks bleeding red are generally a good play for a short seller, who is betting on falling values. Yet activist investors do not wait for rattled markets the likes of which befell markets on Wednesday to sell short a particular company’s stock. Embedded in their sales pitch are well-crafted theories that attempt to challenge Wall Street’s sell-side mentality and, with that, reap a potential cash windfall.

Sahm Adrangi, founder, Kerrisdale Capital Mgmnt

Sahm Adrangi, founder, Kerrisdale Capital Mgmnt

Sahm Adrangi, founder and chief investment officer of Kerrisdale Capital, is among a group of small social media savvy funds who pitch some of their research to the public. Before stocks sank on Wednesday, Adrangi had been pounding the media circuit to get his message out about satellite communications company Globalstar (GSAT), which, he says, has no equity value.

“It’s a multi-billion dollar company that we think is worth zero,” he told the Global Markets Forum.

“Globalstar has been a satellite phone company for years, that satellite phone company is worth less than the company’s debt. When you look really into the details of what Globalstar is proposing, a paid WiFi channel, it doesn’t make any sense. It’s never going to be commercially viable. As a result the equity is worth less than the value of the company’s debt,” he also said in an interview with Reuters Insider.

from Global Markets Forum Dashboard:

GMF @HedgeWorld West, World Bank/IMF and Financial & Risk Summit Toronto 2014

(Updates with guest photos and new links).

Join our special coverage Oct. 6-10 in the Global Markets Forum as we hit the road, from the West Coast to Washington to the Great White North.

GMF will be live next week from the HedgeWorld West conference in Half Moon Bay, California, where we’ll be blogging insight from speakers including Peter Thiel, former San Francisco 49ers great Steve Young and other panelists' viewpoints on the most important investment themes, allocation strategies, reputation risk management ideas and more.

from Global Markets Forum Dashboard:

Billionaire fund managers pick stocks amid scarce macro investing themes – Sohn Conference

Billionaire hedge fund managers are still feeling a polar vortex-like chill even as spring emerges. One by one, they lamented the lack of “macro” ideas that investors can pin their returns on this week at the annual Sohn Investment Conference in New York.

Mike Novogratz, Fortress Investment Group

Mike Novogratz, Fortress Investment Group

larry_robbins.03

Larry Robbins, Glenview Capital

Volatility is at “generational lows,” Michael Novogratz, the principal of Fortress Investment Group told the audience. This year and next year will feel a lot like last year, Larry Robbins of Glenview Capital told investors, as central banks maintain low interest rate policies.

from Global Markets Forum Dashboard:

Bitcoin regulations could come as early as summer – NY regulator

Benjamin Lawsky, Superintendent of the New York State Department of Financial Services

Benjamin Lawsky, Superintendent of the New York State Department of Financial Services

(Note to readers: This blog was orginally posted on May 1, 2014 and was updated on May 15th with news of a Bitcoin-focused hedge fund at the bottom).

from Alison Frankel:

Sotheby’s shareholders defend activist investors in suit vs board

The heat surrounding so-called activist investors -- hedge funds that buy up big chunks of a company's stock, then leverage their position to mount proxy campaigns or otherwise force boards to change the way the company is managed -- could hardly be more intense than it is now. Well, okay, maybe there would be even more controversy if Michael Lewis wrote a book about a genius upstart who defied accepted deal conventions and revolutionized corporate takeover battles. But putting aside the Wall Street tizzy inspired by this week's publication of Lewis's new book about high-frequency trading, the deal world's favorite topic remains activist investors like Carl Icahn, Paul Singer, William Ackman and Dan Loeb.

Just in the last two weeks, Chief Justice Leo Strine of the Delaware Supreme Court published his extraordinary essay on shareholder activism at the Columbia Law Review, the Wall Street Journal did a fabulous story on hedge funds tipping each other off about their targets, and Martin Lipton of Wachtell, Lipton, Rosen & Katz -- whose avowed disdain for short-term investors has recently manifested in litigation with Icahn -- revealed at the Tulane M&A fest that there are actually a couple of activist funds he respects. (He said he wouldn't go so far as to say he "likes" them, though.)

from Bethany McLean:

Is Steve Cohen the real target in this trial?

The fate of Mathew Martoma, the former SAC Capital portfolio manager charged with the biggest insider trade in history -- more than $275 million in profits and avoided losses, says the government -- is now in the hands of a 12-person jury, which began deliberations in a Manhattan courthouse Tuesday afternoon.

But whatever the verdict for Martoma, the trial has been bad news for someone else: Martoma’s former boss, SAC head Steve Cohen. Given the slow, but relentless, nature of the government’s actions against Cohen, it might be worth remembering the old adage: It ain’t over til it’s over.

from Unstructured Finance:

Jim Chanos, bad news bear, urges market prudence

Prominent short-seller Jim Chanos is probably one of the last true “bad news bears” you will find on Wall Street these days, save for Jim Grant and Nouriel Roubini. Almost everywhere you turn, money managers still are bullish on U.S. equities going into 2014 even after the Standard & Poor’s 500’s 27 percent returns year-to-date and the Nasdaq is back to levels not seen since the height of the dot-com bubble in 1999.

“We’re back to a glass half-full environment as opposed to a glass half-empty environment,” Chanos told Reuters during a wide ranging hour-long discussion two weeks ago. “If you're the typical investor, it's probably time to be a little bit more cautious.”

from Unstructured Finance:

Berkowitz, Ackman bets on Fannie and Freddie puzzle investors and policy buffs

On Thursday, the United States threw cold water on Bruce Berkowitz's daring proposal to recapitalize mortgage finance behemoths Fannie Mae and Freddie Mac, saying the only way to revamp the home loan market is through proper housing finance reform.

Berkowitz's Fairholme Capital Management said it wants to buy the mortgage-backed securities insurance businesses of Fannie and Freddie by bringing in $52 billion in new capital, in a bid to resolve the uncertain future of the mortgage financiers by freeing them from U.S. government control. For its part, the government said the way forward would be to create a new housing finance system in which private capital would play a pivotal role.

from Unstructured Finance:

This summer, it’s the John Paulson show

Hedge fund manager John Paulson has shunned the limelight in recent years but in recent weeks it's a different story, with the 57-year-old manager not only giving his first ever TV interview, he's also set to take the stand in one of the most closely-watched trials in the country - the civil case against former Goldman Sachs trader Fabrice Tourre.

Tourre's lawyer Sean Coffey said in a Manhattan federal court on Friday morning they intended to call Paulson to testify in the trial. The U.S District Judge overseeing the trial estimated Paulson would probably take the stand August 1.

from Unstructured Finance:

Daniel Loeb surfing to the top of the hedge fund charts again

Something must be in the water over at 399 Park Avenue, where Daniel Loeb’s hedge fund Third Point is headquartered. His Third Point Ultra fund has already gained 12.42 percent this year through the 13th of March, according to data from HSBC’s Private Bank.

The portfolio added 3.3 percent alone between March 1 and March 13. By comparison, hedge funds have returned about 4 percent year-to-date, according to HSBC.

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