Thursday, October 30, 2008
I have had hedge fund managers literally in tears on the phone
how financial predators became the prey in the audacious multi-billion takeover of VW by Porsche While "hedgies" bet on VW shares falling because of the global economic downturn, regarded by some as "the safest play in town", Porsche had been secretly building up a 74.1 per cent stake in VW through intermediaries. When Porsche showed its hand, it sent the VW share price rocketing and exposed the hedge funds to breathtaking losses. "I have had hedge fund managers literally in tears on the phone," said one London-based analyst yesterday. Others likened the Porsche disclosure to a "nuclear bomb going off in our faces", describing the resulting losses as "a bloodbath".