John Paulson Sold Large Chunk of Bank of America

Jun 30, 2011
J. Webster
Comments Off on John Paulson Sold Large Chunk of Bank of America

CNBC is reporting that John Paulson and his hedge fund have sold a large chunk of Bank of America. This is just on the back of the recent news that Bank of America paid mortgage backed securities investors $8.5 billion in a settlement. I wonder if he bailed out before this news….? The stock popped on this news after all.

Well, CNBC’s Kate Kelly is also saying that Paulson may regret selling his BAC shares after this news. Is this odd? Yes. Doesn’t really seem like much of a story. Seems more like waffling on the part by Paulson, is he bullish on BAC or bearish? Hard to tell. And not good for any investors looking to follow Paulson – who become legendary when he bet, correctly, the housing market would fall apart in 2007-2008.

During the course of the past two months, Paulson sold a substantial portion of its 124 million-share stake in BofA, according to these people.

In light of yesterday’s news, firm founder John Paulson may now, in fact, be regretting his decision, these people say, and looking to upsize his holdings in the bank yet again.

The apparent selldown is significant because of Paulson’s outsized influence both in the hedge-fund world and at BofA, where he is the eighth-largest shareholder of record, according to first-quarter securities filings.

ZeroHedge, the get to the point and straight talking financial blog, is saying Bank of America is under reserved and there’s more likelihood of other mortgage backed settlements from the CountryWide purchase by BofA. In other words, the stock will have to sell shares to raise capital at some point.

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