- Hedge funds fear bankruptcy after Porsche squeeze
- Porsche and VW share row: how Germany got revenge on the hedge fund 'locusts'
- German regulators cringing after Porsche debacle
- Now Porsche should concentrate on carmaking
- VW and hedge funds: Squeezing the accelerator
Hedge funds fear bankruptcy after Porsche squeeze - The Times of London
Hedge funds were heading for a full-blown row with the German Government last night as it emerged that funds sitting on tens of billions of euro losses after short-selling Volkswagen could go bankrupt.
Porsche, VW's biggest shareholder, stands to pocket a quick €6billion (£4.7billion) profit from the short-selling.
The London-based Alternative Investment Management Association (Aima), the hedge fund trade body, said yesterday that it planned to ask the European Union to clamp down on a controversial German legal loophole that allowed Porsche secretly to take its VW stake to almost 75 per cent.....However, hedge fund sources said Porsche may be forced to sell much more than this to cover the tax bill on its paper profit, which would drive down VW's share price farther.
Porsche and VW share row: how Germany got revenge on the hedge fund 'locusts' - Daily Telegraph
With its jaws gaping, poised to swallow its prey, Damien Hirst's tiger shark in formaldehyde takes pride of place in the $700 million art collection of the hedge fund manager Steven A Cohen.
Until now, it had served as a symbol of the killer instincts which made Mr Cohen and his fund SAC Capital one of the biggest predators in the world's financial markets, earning him a personal fortune estimated at $8 billion.
"I liked the whole fear factor," he said cheerily when explaining what had attracted him to the Hirst shark which he bought for $8 million four years ago.
The fear factor is something Mr Cohen, and around 100 other hedge fund managers, are experiencing, like never before, as SAC Capital and others collectively lost a staggering £24 billion with a doomed gamble on Volkswagen shares, according to the Wall Street Journal.....
Hedge funds lose billions as VW share price dives - Daily Telegraph
Hedge funds nursing multi-billion-dollar losses from a wrong-way bet on Volkswagen shares have launched a furious attack on the German financial authorities, branding their handling of Porsche’s move to control its rival as a ''fiasco’’ and ''criminally irresponsible’’.
The backlash comes as it emerged a raft of the world’s top hedge funds have been caught out by the swings in VW’s share price in the past two days that are estimated to have cost the global sector €30bn (£23.7bn).
One fund said: “In any other country in the world, taking control of a company in secret and still not launching a bid would be illegal. We believe the reactions of the German regulators to be criminally irresponsible but we are confident that this will be sorted out.” Another said: “We are stunned by the unregulated nature of the German market. This is a complete fiasco. Forget buying a Porsche, traders around the world will simply avoid Germany after this.”....
German regulators cringing after Porsche debacle - The Times of London
Germany's stock market regulators are the laughing stock of Europe.
It is embarrassing that Porsche could have been allowed to build a secret options stake in Volkswagen equivalent to 32 per cent of its market value, on top of an existing holding of 43 per cent, with no disclosure. A false market of epic proportions was allowed.
But that does not mean those short-selling hedge funds nursing nasty losses have real grounds for complaint.
They knew perfectly well, or should have known, the lacuna in the German rules and the fact that such positions could be kept secret. Given the ferocity with which they fought proposals to close precisely this loophole in the UK, they have no excuse for ignorance and little cause for sympathy.....
Now Porsche should concentrate on carmaking - Financial Times
After doubling its stake in Volkswagen, Porsche on Wednesday doubled the free float of VW’s shares – albeit to a still measly 10 per cent. It said it was selling 5 per cent of VW to avoid “further market distortions” that had sent VW’s shares to irrational levels and threatened the survival of some hedge funds.
Was Porsche told to do so or did the German sports car manufacturer decide off its own bat to make a gesture to show that, after all, it is not the villain of the piece? The answer is neither here or there. Of course, Porsche’s blitz on VW raises all sorts of important issues, including the role of Germany’s financial watchdog, the need to regulate cash-settled options and so on....
VW and hedge funds: Squeezing the accelerator - The Economist
IT IS hard to feel sorrow for hedge funds. Their reputation as ruthless investors and the largely unwarranted blame for amassing huge sums of cash as the financial system crumbled have earned them unflattering comparisons to locusts, spivs and far worse. But if there were ever a moment when the hedge funds might be deserving of a modicum of pity it may be now. On Tuesday October 28th Volkswagen’s share price briefly made it the most valuable company in the world, at a time when many hedge funds had placed substantial bets that the German car company’s value would shrink.
The damage from the head-on collision between many scores of hedge funds (and maybe some banks) is yet to become fully apparent. Some early estimates suggested that the losses from the “short squeeze” could be as much as €30 billion ($37.4 billion), although the final tally will probably be many billions less. Ironically, given that some hedge-fund managers live up to their popular brash and conspicuously wealthy image, the other car company involved in the pile-up is Porsche.....
Comments