Monday, 29 June 2015
Last updated 19 min ago
Nov 17 2011 | 1:02pm ET
Delphi Automotive's return to the public markets could not have come at a better time for one seriously downtrodden hedge fund manager.
Delphi, which filed for bankruptcy six years ago, went public this morning and promptly dropped below its offering price of $22. But that's no matter—or small matter—for Paulson & Co., which may have made more than $400 million on the deal.
The New York-based hedge fund, which has seen its main hedge funds lose double-digits this year, was to be the largest participant in the IPO, selling more than 80% of its shares in the company. But Paulson likely scooped up the convertible debt that became its stake in Delphi for pennies on the dollar; Bloomberg News estimates that Paulson and other investors who snapped up the debt paid an average of 67 cents per share, or $14 million for the $453 million in shares Paulson sold today.
If all of that is the case, Paulson today made back almost all of the money it lost on Sino-Forest Corp., the Chinese timber company whose stock plummeted in June after it was accused of overstating its timber holdings. Paulson had been Sino-Forest's largest shareholder.
Paulson still owns about 16% of Delphi, which is controlled by lenders including Elliott Management and Silver Point Capital.
May 27 2015 | 2:15pm ET
Support Hedge Funds Care, also known as Help For Children (HFC), by participating in this year's raffle. All proceeds go to support HFC's mission of preventing and treating child abuse. Read more…