As Soros Foresees Financial Crisis, Here Are His European Shorts (Bloomberg)
Billionaire George Soros, who warned of a looming financial crisis and an existential threat to the European Union on Tuesday, is shorting stocks from Stockholm to London. His family office has about $256 million in disclosed wagers against European companies, a bet hedge funds usually put on to benefit from declines to share prices, according to data compiled by Bloomberg. Below are the top five short bets of Soros’s investment firm by market value.
Sears Shares See-Saw After CEO Lampert’s Hedge Fund Hints at Deal with Partners (USAToday.com)
Shares of Sears Holdings rose in pre-market trading Tuesday after the hedge fund controlled by Sears’ CEO Edward Lampert said it had received “numerous” inquiries from potential partners. Sears Holdings has both the Sears and Kmart department store chains. Its stock rose nearly 2.3% to $3.57 before U.S. financial markets opened. But the shares fell 1.7%, to $3.43, in regular Tuesday morning trading. Lampert’s ESL Investments asked a special committee of the company’s board of directors for permission to “engage with” potential partners “to allow us to put forward a definitive proposal that will result in the most benefit to Sears.”
These Hedge Funds Make Profit From Bets Against Stocks in Italy (Bloomberg)
Hedge funds including Bridgewater Associates and Marshall Wace are making a killing on their wagers against financial stocks in Italy as the nation’s political turmoil reverberates through Europe’s periphery. Banco BPM SpA and Intesa Sanpaolo SpA were some of the biggest losers on Monday and Tuesday as Italy’s populist parties began mobilizing for an early election, raising fears of another looming crisis in in the region. The contagion spread to financial shares in Portugal and Spain, with Banco Comercial Portugues SA, the biggest loser in the sector. The Euro Stoxx Banks Index was down 4.6 percent.
Sunesis Capital’s Mehta Questions Einhorn’s Greenlight Re Model (Seeking Alpha)
Manal Mehta, founder and managing partner of hedge fund Sunesis Capital, recently posted a report that questions whether David Einhorn‘s Greenlight Re (NASDAQ:GLRE) is a true insurance business or if it’s just a way for Einhorn and his hedge fund to avoid U.S. taxes. IRS regulations require offshore reinsurers to be actively engaged in the insurance business, otherwise, they’re classified as a passive foreign investment corporation–or PFIC–and would be subject to U.S. taxes.