Insider Trading Report: John Angelo and Michael Gordon’s Big Bet

Angelo Gordon & Co. bought 500 thousand shares of Fairpoint Communications Inc (FRP) on Thursday. The fund’s average price for this large transaction was $10.59. They paid as much as $10.94 for these shares. Last Monday the stock was trading above $16 per share but closed at $9.59 on Tuesday after their earnings announcement. This huge decline prompted other insiders to step in and purchase FRP shares as well.

Today Paul Sunu, FRP’s CEO, disclosed the purchase of 1000 shares at $11.18. Edward Horowitz, a member of the company’s board, purchased 5000 shares at around $10. Paul Sunu also purchased 8000 shares last Thursday at around $10.

Angelo Gordon & Co now has more than 5.1 Million shares in its portfolio, that is nearly 20% of FRP’s outstanding shares. There are other hedge funds betting big on FRP as well. John Paulson’s Paulson & Co. had 2.3 Million shares, Bruce Richards’ Marathon Asset Management had 1.75 Million shares, and Kevin Ulrich’s Anchorage Advisors had 2.28 Million shares at the end of March. These are all new positions because Fairpoint came out of bankruptcy earlier this year. Collectively twelve hedge funds that we are tracking own more than 50% FRP. Marathon Asset Management sold more than 1 Million shares during the last week of March, and sold an additional 300 thousand shares at the beginning of April. However, the stock price was around $17 at the time. Now, it is $11.

Angelo Gordon & Co was founded by John Angelo and Michael Gordon in 1988. This is a private equity firm focusing on distressed investing. They also have hedge fund operations.