Friday, 19 September 2014
Last updated 12 hours ago
Jun 10 2010 | 11:36am ET
Last month, William Ackman told us that his hedge fund had bought a $600 million stake in Citigroup. Now, he’s explaining why.
In a letter to investors last week, Ackman said that Citi shares are trading “at a meaningful discount to their fair value.” Continuing his paean to the troubled bank, the Pershing Square Capital Management chief cited “two important elements of Citi that the market does not fully appreciate.”
The first is a $21 billion operating deferred tax asset, which could be used to cut the bank’s future tax liabilities on profits. The second is as much as $30 billion in excess capital, which will be returned to shareholders when Citi finishes selling off or shutting down business it no longer wants.
Still, Ackman acknowledged “a much greater degree of uncertainty” with Citi than with some of Pershing Square’s other holdings.
“That said, we believe the current stock price, capital structure and hidden assets provide a margin of safety, in light of the large potential reward from this investment,” he added.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.