Wall Street Folly

Long time investor Guy Wyser-Pratte is the latest to bar his $500 million Eurovalue hedge fund’s investors from withdrawing their money.  According to the Financial Times:

“I have come through ’68, ’72,
’86, ’87, ’98 and 2002,” he told the Financial Times. “But this is the
worst and one has to act prudently in times like this. It is
batten-down-the-hatches time.

“Who could think of a more calamitous environment and a more opportune time to
do something like this to protect non- redeeming shareholders [in the funds] and
prevent redeeming shareholders shooting themselves in the foot?”

Hedge fund blocks client withdrawals – Financial Times

Tags: Credit Crunch, Hedge funds, Risk arbitrage

Did we happen to mention before that we LOVE volatility?  Well today we got it in spades, with Bear Stearns, where the talk that Warren Buffett and others  might take a stake in that besieged stock caused it to skyrocket, and Sallie Mae, where many bailed prematurely on the stock and left it for road kill after they read a statement from SLM that they interpreted as a definitive one that the deal wouldn’t close.  Here’s what the statement said:

SLM Corporation, commonly known as Sallie Mae, announced today that it has been informed by a representative of the buyer group led by J. C. Flowers, Bank of America and JPMorgan Chase that the buyer group does not expect to consummate the acquisition of Sallie Mae under the terms of the merger agreement. Sallie Mae firmly believes that the buyer group has no contractual basis to repudiate its obligations under the merger agreement and intends to pursue all remedies available to it to the fullest extent permitted by law.

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Tags: Bank of America, Charts, Credit Crunch, LBO / MBO, Legal, Risk arbitrage

• American Home Can’t Fund Loans, Says It May Have to Liquidate
• C-Bass Subprime Venture in Talks With Investors to Ensure Funds
• Heard on the Street: Betting on Mergers Can Pay Despite Widening Spreads
• Corporate Buyers Hit Gas on Deals
• Subprime Troubles Spread To Commerzbank, IKB
• A Stumble for ‘Bank Loan’ Mutual Funds

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Tags: Mutual Funds, Private equity, Risk arbitrage