How to Trade the Banking Turmoil, According to a Hedge Fund Veteran (Bloomberg)
Bank Bets: Boaz Weinstein has made his fortune at moments like this. The choppier markets get, the more mispriced financial assets his firm, Saba Capital Management, can find to exploit. One of Saba’s funds has posted a 6.9% gain this month alone. Weinstein, who was thrust into prominence a decade ago when he took on JPMorgan’s London Whale, sees plenty of price dislocations in the market. Prominent among them: Junior bank debt. Some is still overvalued, he says, even after the selloff this week that followed the wipeout of $17 billion of Credit Suisse Group junior debt.
Exclusive: ValueAct Seeks to Oust Four Directors of Seven & I (Reuters)
ValueAct Capital informed Seven & i Holdings (3382.T) on Friday it would lobby to remove four directors from the Japanese convenience store operator’s 14-member board, citing “a failed corporate strategy”. ValueAct, which owns a 4.4% stake of Seven & i, had called on the company’s management in January to spin off its 7-Eleven convenience store chain. The fund has been invested in the company and making proposals since 2021.
Billionaire Hedge Fund Boss Who Beat Irish Attempt to Burn Bondholders Says Swiss Must Pay (Independent.ie)
US billionaire David Tepper, who beat the Irish Government’s attempt to burn junior bondholders back in 2013, has now put himself in the vanguard of efforts to fight €17bn of losses on risky Credit Suisse bonds. The losses on holders of very risky bank bonds were imposed by Swiss authorities as part of the lightning fast rescue of Credit Suisse last weekend and are controversial because holders were wiped out even before shareholders.
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Bill Ackman Shares ‘Learnings’ From Investing ‘Mistakes:’ 1 Stock He Missed Out On, Another That Burnt His Fingers (Benzinga)
Hedge fund manager Bill Ackman spends a lot of time learning from his mistakes and in a recent interview he discussed how his bets have served as learning opportunities. Reliving Gotham Days: Following a debacle, there may not be a formal postmortem but certainly, there were a lot of lessons learned, Ackman said in a 20VC podcast that was published earlier this week.
Bed Bath & Beyond Investor Preserves Fundraising Deal Despite Tanking Shares (The Wall Street Journal)
Bed Bath & Beyond Inc. has secured a temporary stock-price waiver from key equity investor Hudson Bay Capital Management LP to keep a fundraising agreement intact despite a possible price failure when the retailer’s shares dropped below $1 this week. The waiver will remain in effect until the morning of April 3, allowing Bed Bath & Beyond to continue raising money from its agreement with the hedge fund to exercise warrants for new preferred convertible shares, the company said Thursday.
A Three Arrows Capital Founder Talks About His New Crypto Bankruptcy Exchange (CoinDesk)
Less than a year after Three Arrows Capital (3AC) imploded along with $2.5 billion of clients’ money, the hedge fund’s founders, Su Zhu and Kyle Davies, are back with a new cryptocurrency exchange where people can trade bankruptcy claims – a hot area given all the distress in the industry. The Open Exchange (OPNX) was announced last month, garnering wry smiles and smirks. The crypto community hadn’t always been so skeptical of the duo. Until the $60 billion Terra ecosystem collapsed last April, they were hailed as messiahs among their peers, touted for running the hottest hedge fund and often endorsed by trading firms and market makers.
This Hedge Fund Lost Big Last Year — But That Didn’t Scare Investors Away (Institutional Investor)
Strategy Capital, like many managers of technology stocks, had a rough 2022. But the long-only, tech-focused hedge fund’s dismal performance — it was down 65 percent — doesn’t seem to have turned off investors. Bill Mitchell, partner and managing director, said Strategy Capital didn’t lose a single investor and had its best fundraising year since it started in 2013. The fund attracted more than $200 million from new and existing clients, bringing its total assets under management to nearly $600 million.
Fund Manager Hohn Demands Cellnex Board Changes to Speed CEO Search (Reuters)
Hedge fund manager Christopher Hohn on Thursday wrote to Cellnex (CLNX.MC) demanding Europe’s largest mobile phone tower operator remove its chairman and two other board members, and said the search for a new chief executive has been mishandled. Hohn, who runs hedge fund TCI Fund Management, owns 3.1% of Cellnex’s shares and 5.9% in derivatives, corporate records show.
Cathie Wood Doubles Down on Block, Coinbase as Shares Tumble (Bloomberg)
Cathie Wood snapped up more shares of Block Inc. and Coinbase Global Inc. as turmoil engulfed both companies Thursday. The daily trading report from Wood’s firm ARK Investment Management showed that three of its exchange-traded funds bought about 338,000 shares of Block in the session, during which the payments firm plunged 15% after becoming the target of activist short seller Hindenburg Research.
AT1 Bond Wipeout: Not the Default Mode of Resolutions (Hedge Nordic)
As part of the takeover of Credit Suisse by UBS, Swiss financial regulator FINMA instructed the credit-stricken bank to write down 16 billion Swiss francs of additional tier-1 (AT1) bonds. This puts the traditional, common-sense pecking order hierarchy in turmoil as equity shareholders are set to receive payouts from the takeover. This prompted AT1 investors to threaten legal action and other European financial authorities to distance themselves from the decision of the Swiss Financial Supervisory Authority.
Hedge Fund ExodusPoint Drives Recruitment with JPMorgan, BofA Hires (Financial News)
Hedge fund ExodusPoint Capital Management is pushing ahead with new hires as part of a broader shift to bolster its portfolio management and analysis team. Evangelos Makris is the latest to be drafted into the firm as an analyst from JPMorgan, where he was a senior associate for three years. He started as an associate with the bank in December 2019 and was later promoted to the position of senior associate in November 2021. Makris worked at Tokyo-headquartered Mitsubishi UFJ Financial Group prior to that.
Friday 3/24 Insider Buying Report: CVGW, PFSW (Nasdaq.com)
At Calavo Growers, a filing with the SEC revealed that on Wednesday, Chief Executive Officer Lecil E. Cole purchased 50,000 shares of CVGW, for a cost of $24.29 each, for a total investment of $1.21M. So far Cole is in the green, up about 10.1% on their purchase based on today’s trading high of $26.74. Calavo Growers is trading up about 7.4% on the day Friday. And on Tuesday, CEO/President Michael C. Willoughby bought $211,000 worth of PFSweb, buying 50,000 shares at a cost of $4.22 a piece. This purchase marks the first one filed by Willoughby in the past twelve months. PFSweb is trading down about 6.5% on the day Friday.
Over $1M Bet On This Energy Stock? Check Out These 3 Stocks Insiders Are Buying (Benzinga)
Tidewater: The Trade: Tidewater Inc. (TDW) Director Robert Robotti acquired a total of 27,000 shares an average price of $39.64. To acquire these shares, it cost around $1.07 million. New Mountain Finance: The Trade: New Mountain Finance Corporation (NMCF) Director Steven B Klinsky acquired a total of 100,000 shares at an average price of $11.74. To acquire these shares, it cost around $1.17 million.
DOJ And SEC Charge Individual For Insider Trading Through Use Of 10b5-1 Trading Plans (Lexology)
On March 1, 2023, the Department of Justice (“DOJ”) unsealed an indictment against the founder, CEO, and Chairman of a publicly traded health care company (the “Company”), alleging that he had illegally executed trades pursuant to Rule 10b5-1 trading plans while in possession of material nonpublic information. The Securities and Exchange Commission (“SEC”) filed a concurrent civil suit against defendant for the same activity. In each case, the government alleged that defendant improperly used his 10b5-1 plans by entering into them while in possession of material nonpublic information and triggering sales shortly thereafter, without any form of cooling-off period.
