Just for Fun I wanted to put his post together (as a speculated guess) to uncover the Hedge fund backing the GE short.
It was recently disclosed that Harry Markopoulos has disclosed a potential accounting fraud in GE. He is backed by an undisclosed Hedge Fund.
I believe this hedge fund to be Pershing Square Capital Management (PSCM) Bill Ackmans fund because;
- PSCM recently took a position in Berkshire Hathaway. (one of the biggest; best capitalised and most liquid insurers in America). GE is exact opposite, one of the worst capitalised insurers with little tolerance on the balance sheet for write downs, economic downturns and questions around the capital reserves.
The BRK position would act as the natural hedge to the GE short position.
If not GE what else is the hedge for his Berkshire trade??? PSCM is a hedge fund after all.
- PSCM has been hit with reputational damage and regulator issues on the Herbal Life short in a past trade.
Bill has mentioned in the media that he will be reluctant to approach a stock short in the same manner as Herbal Life due to reputational risk and also the risk that regulators are reluctant to investigate a company as the shorting Hedge Fund profits from the mere appearance of an investigation.
To mitigate/avoid this risk, Bill has said instead PSCM will disclose in private to the regulator rather than make public disclosure. Markopoulos has said the regulator was informed before the August public disclosure.
- Where is Bill Ackman?
Normally Bill is in the media discussing/detailing the PSCM new positions.
Also, in my opinion, Bill would likely oblige the media by publicly disclosing to the market that PSCM is not the Hedge fund shorting the GE stock, given point 2 above.
Bill's absence from the media is quite telling me.
Using Markopoulos to publicly disclose the trade is a shrewd/novel way of getting around this.
- Why would a Hedge Fund care if their publicly short a beaten up stock like GE?
Isn't the point of Hedge Funds to be long and short stocks and be market neutral - see point 2.
(I will defer that regulator issues may be one).
I did think the PSCM was the most likely from T+6hrs from the first disclosure so I may have had inbuilt bias. But we will see. This is just for fun with bit of logic and public knowledge, no more than Markopoulos has done for his research.
(It really doesn’t matter who the Hedge Fund is)
Let’s hear your ideas or criticize my points.
Submitted August 17, 2019 at 07:21PM by TigerKingz https://ift.tt/2KEY6Dr
