Barclays Diamond Takes a Shine to U.S. Brokers
Is Robert Diamond, the head of Barclay's (BCS-NYSE) out of his mind? Reports out of Europe indicate that he is considering doing a Jamie Dimon impersonation, and buying a U.S. financial institution:
Bob Diamond, the bank's president and the head of its investment banking arm, is thought to have looked at both Lehman Brothers and UBS in recent weeks..... Irfan Younus, an analyst at NCB Stockbrokers, said an acquisition cannot be ruled out, but any expansion in the capital markets arena is unlikely to be well received given the perception that Barclays' write-downs still look light compared to peers.
"Bob Diamond has said several times since last summer that he would not want to miss out on the chance of taking advantage of the current market turmoil to grow in the U.S.," Younus said. MarketWatch
Apparently Diamond thinks he is operating from a position of strength, claiming that he has taken fewer writedowns and is healthier than his peers.
A glance at the chart of Barclay's indicates otherwise, however, and he is also unlikely to get a bargain basement price similar to what Jaime Dimon was handed.
And reading between the lines, Diamond's ego might be playing a role.
Eric Sprott Suggests Shortsellers Ruined Public Debut of Sprott, Inc.
One of the most profitable areas for hedge fund managers to find profitable shorts over the past 12 months has been in asset management stocks, particularly among the recent crop of IPO's. Alternative or vanilla, its been a less than memorable for aftermarket buyers of the stocks.
Indeed, there is nary a winner to be found in Och-Ziff Capital Management (OZM-NYSE), Fortress Investment Group (FIG-NYSE), Pzena Asset Management (PZN-NYSE), GLG Partners (GLG-NYSE) or Blackstone Group (BX-NYSE). And while the valuation compression might lead to some opportunities to get long, there is no historical valuation data to hang your hat on, and the valuation premiums garnered by the alternative managers might remain excessive to their vanilla peers. But are brazen shorts manipulating trading in the stocks?
Eric Sprott thinks it might be the case. Sprott is blaming a tepid reception of his Canadian asset management operation, Sprott, Inc. (SII.TO-Toronto) on short sellers:
Star hedge fund manager Eric Sprott admits he was taken aback by his company's less than stellar stock market debut Thursday, and figures short sellers were behind the massive trading volume.
“I have to believe or think or conclude that there must have been some significant short selling,” Mr. Sprott, the founder, chairman, chief executive officer and controlling shareholder of Sprott Inc., himself a short-seller of no mean repute, said Friday.
“I can't believe that on a 20-million-share issue that 12 million shares, approximately, should trade – it's ludicrous, ” he said in a telephone interview before stock markets opened Friday and the shares fell again. Globe and Mail
Alpha Males Gang Up on Jerry Yang and Yahoo!
Jerry Yang’s golf game should be much improved by this time next year; the list of bullies getting ready to push him around is getting longer by the hour.
Can he possibly prevail in the face of superior firepower?
Paulson & Co., the New York hedge- fund manager run by John Paulson, owned 50 million Yahoo! Inc. shares as of March 31, according to a filing today with the U.S. Securities and Exchange Commission.
The stake equals 3.6 percent of the Sunnyvale, California- based company’s outstanding shares.
Billionaire investor Carl Icahn today threatened to seek control of Yahoo’s board if the Internet company doesn’t revive takeover talks with Redmond, Washington-based Microsoft Corp. over its failed $47.5 billion bid. Icahn disclosed that he owns the equivalent of 59 million shares, or 4.3 percent. John Paulson was paid an estimated $3.7 billion, the most in the hedge-fund industry, according to Institutional Investor’s Alpha magazine. The firm, which oversees about $33 billion, made money betting on the collapse of subprime mortgages in 2007. Bloomberg
Carl Icahn is far from infallible, as his recent foray with WCI Communities shows. But getting Paulson, who is sporting some awfully deep pockets, on board with his program certainly helps. Add Mark Cuban into the mix with Gordon Crawford, and even Bill Miller might end up smiling soon.
Update: Yahoo! Responds
Paulson Holds 50 Million Yahoo Shares, Filing Says
Bloomberg
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Paulson Joins Icahn in Yahoo! Fight
Originally Published In the News May 15, 2008 2:25 PM
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John Paulson made the biggest trade in Wall Street history, and is investing some of his profits into Yahoo!’s stock as activists look to shake up the jokers running the company:
Paulson & Co, the hedge fund that won a huge bet over the last year on the subprime credit meltdown, has built up a stake of around 50 million shares in Yahoo Inc (YHOO.O: Quote, Profile, Research) in recent months, sources familiar with the matter told Reuters.
Paulson, a $30 billion “merger arbitrage” hedge fund led by veteran investor John Paulson, began increasing its stake around the time when Microsoft Corp (MSFT.O: Quote, Profile, Research) made its unsolicited offer to buy the company, the sources said.
While the Microsoft-Yahoo talks ended this month, the share build-up suggests that Paulson is betting a merger will eventually happen, particularly since billionaire investor Carl Icahn launched a proxy battle on Thursday to replace the entire Yahoo board. Reuters
If Paulson makes 6 points on the stock, he will clear $300 million. Is it worth him even getting out of bed for such a paltry sum? One thing is certain, Icahn will welcome the reinforcements.
Paulson hedge fund buys 50 million Yahoo shares
Reuters
