Cash Shells: SPACs, MathStar, PetroSearch and Cadus

July 28, 2009

It has been a while since we first reported on SPAC liquidation arbitrage in January. The battles over MathStar (MATH) and PetroSearch (PTSG) has prompted us to follow up, as did our annoyance with the slow progress at Cadus (KDUS).

SPACs represented a great liquidation arbitrage late last and early this year when they traded well below their cash value at double-digit annualized yields. Other companies trade occasionally below cash, usually when Read the rest of this entry »

Pershing Square Misleads About General Growth’s Equity Value

June 8, 2009

Pershing Square LogoPershing Square Bill Ackman’s presentation about General Growth Properties (GGWPQ) at the Ira Sohn Investment Research conference has us wondering what he is up to. The tone of the presentation clearly targets an audience that is not familiar with bankruptcy investing. At the same time, his financial projections for GGP are overly optimistic and do not square (no pun intended) with current results. We believe that some of his analysis is very misleading. Read the rest of this entry »

Avenue Capital’s Marc Lasry Is In Therapy Over Depressed Asset Prices

February 23, 2009
Marc Lasry, Avenue Capital

Marc Lasry, Avenue Capital

At the first Wharton Hedge Fund Conference keynote speaker Marc Lasry of Avenue Capital declared that he was still in shock over how his firm got to $22 bn in size. Lasry started his firm in 1995 after breaking off from an entity that is affiliated with the Bass family with $7 million, expecting to run a few hundred million dollars if things were to go well. At its peak in 2007, the firm exceeded all targets with $22 billion in assets under management. The wonders done by a decade of liquidity and leverage helped him grow beyond his wildest dreams. Read the rest of this entry »

SPAC Liquidation Arbitrage: How To Profit From Hedge Fund Redemptions

January 28, 2009

Among the least-damaged victims of the boom’s unwinding are SPACs, which arguable were among the worst manifestations of the irrational exuberance driven by excess liquidity. Despite their relative resilience to the bust, their cash hoards coupled with limited life offer an interesting arbitrage opportunity with yields that, in some cases, reach well into the double digits.

SPACs are an outgrowth of blank check companies, which got a bad name when some were scams run through boiler room operations. The SEC Read the rest of this entry »