Editor’s Note: Related tickers: AT&T Inc. (NYSE:T), Dell Inc. (NASDAQ:DELL), Goldman Sachs Group, Inc. (NYSE:GS)
One of the first lessons beginning investors learn is the value of diversification in preventing big losses. But in order to reap the largest gains when they make the right call, aggressive investors often use concentrated portfolios to tap into trends they see as potentially providing explosive growth opportunities. Unfortunately, those big bets don’t always work out. Hedge fund giant John Paulson has learned that lesson well this year with his gold-oriented fund, which has lost 65% of its value so far in 2013…
AT&T to pay hefty $1.2 billion for Leap in latest telco deal (Reuters)
AT&T Inc. (NYSE:T) will buy Leap Wireless International, Inc. (NASDAQ:LEAP) for $1.19 billion, paying almost double the current value of the prepaid mobile service provider as major U.S. carriers scramble to acquire valuable wireless spectrum. …Under the deal, Leap Wireless International, Inc. (NASDAQ:LEAP) cannot solicit rival bids but AT&T Inc. (NYSE:T) has the right to match rival offers that surface. Also, the companies said Leap shareholders will get the proceeds from a future sale of spectrum in Chicago that Leap Wireless International, Inc. (NASDAQ:LEAP) bought from AT&T Inc. (NYSE:T) in 2012 for $204 million. AT&T Inc. (NYSE:T) said it would keep Leap’s Cricket brand name. …At the end the of the first quarter, $19 billion hedge fund Paulson & Co owned 7.8 million shares or just shy of 10 percent of Leap Wireless International, Inc. (NASDAQ:LEAP), according to a regulatory filing.
Carl Icahn improves Dell counter-offer (BBC)
Mr Icahn is now offering the right to buy more Dell Inc. (NASDAQ:DELL) shares at a later date to his previous share buyback plan. In May, Dell Inc. (NASDAQ:DELL)’s board recommended that shareholders should accept a $24.4bn (£16bn) offer led by company founder Michael Dell. But Mr Icahn, who owns almost 9% of Dell Inc. (NASDAQ:DELL), says the offer undervalues the firm. Shareholders will vote on Michael Dell’s offer on 18 July. Mr Icahn opposed the offer and has instead suggested the company buy back 1.1 billion shares at $14 a piece – but now proposes adding warrants, meaning that investors also get the right to buy one Dell Inc. (NASDAQ:DELL) share for $20 over the next seven years.
Coffey Haunts GLG’s Investors as Sibanthracite Pulls IPO (SFGate)
GLG Partners Inc.’s attempt to mitigate losses from former hedge-fund manager Greg Coffey’s bet on a Siberian coal mining company was dealt a blow after Sibanthracite Plc pulled its initial public offering. The GLG Emerging Markets Growth Fund, a pool created to run down assets acquired by Coffey, had sought to raise as much as $214 million by selling its 25 percent stake in the IPO. The fund, now part of London-based Man Group Plc, will try to find an industrial buyer for the holding, its biggest asset, two people with knowledge of the matter said on July 12.
Hong Kong hedge fund managers lose jobs as opportunities dwindle (Opalesque)
Hong Kong-based hedge fund managers are losing their jobs as offshore fund managers wind down their operations from the former British colony because of slowing growth on the mainland and increasing opportunities in the U.S., the South China Morning Post reports today, adding that a leading hedge fund had just let is chief financial officer go. According to the report, hedge funds are seeing opportunities in the recovering U.S. economy as well as the appreciating U.S. dollar.
Gold shines to $1,291 an ounce on hedge fund buying (Opalesque)
Heavy buying by hedge funds last week lifted the gold price to its highest level since October 2011 which finished in the spot market at $1,277.60 an ounce on Comex, various media reported. Spot gold is currently trading up 0.5% to $1291. Proactive Investors cites data from the U.S. Commodity Futures Commission (CFTC) for July 9 that showed that futures market rose 5.4% last week and speculators increased their net-long positions over 4% to 35,691 futures and options on news that Federal Reserve’s chairman Ben Bernanke would pull back on the quantitative easing package.
Book Review: Hedge Fund Market Wizards (CFAInstitute)
Determining how great traders acquire and use their special skills has been an elusive quest. We have no shortage of cookbooks on how to trade, but only a limited number of books describe the decision processes of those who speculate as a profession. Trader confessionals exist often as testimonies to egos, but few focus on the details of decision making. Material that does successfully capture the essence of how speculators think is the Market Wizards series by Jack D. Schwager.
Trust CEO Recalls Big Hedge Fund Egos, Porn Donation (Bloomberg)
As chief executive officer of the National Philanthropic Trust, Eileen R. Heisman counsels billionaires, receives their seven- and eight-figure wire transfers and accepts odd gifts such as surf boards and an antique Army tank. Heisman has made the Jenkintown, Pennsylvania-based trust a player in the charity world. Since its launch in 1996, it has raised more than $3.3 billion in gifts and has made grants totaling $1.7 billion to charities around the world. The trust also manages $1.7 billion in assets, which include about 3,000 donor-advised funds.
