Paulson Cuts Embattled Timber Co.

Jun 21 2011 | 8:20am ET

Paulson & Co. has abandoned its huge stake in Chinese timberland owner Sino-Forest Corp., taking a huge loss for its investors.

The US$37 billion New York-based firm said yesterday that it had sold off its entire 14% stake in Sino-Forest. That company, accused of overstating its timber holdings in China by hedge fund Muddy Waters, has seen its stock price plummet 85% since the beginning of the month.

That translates to a US$720 million loss for Paulson, whose nearly 35 million Sino-Forest shares were worth C$815.8 million in April but just C$110.7 million at the end of last year, when Paulson said it had sold the last of its shares. On the bright side for the hedge fund, Paulson sold off its stake prior to a Saturday report in the Globe & Mail newspaper backing some of Muddy Waters’ claims, which sent Sino-Forest shares down even further yesterday.

Sino-Forest has denied the allegations against it.

“Due to the uncertainty over Sino-Forest’s public disclosures and financial statements, we have sold our stock and await the results of the independent committee’s investigation,” Paulson said. The hedge fund, which had invested in the company since at least March 2008, was Sino-Forest’s largest shareholder.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.