Shorting Madoff's Stocks

Now that we know that the government is liquidating Bernard L. Madoff Investment Securities, it may mean that there will be some downward pressure on the stocks that Madoff's firm owns. Does this mean that there could be some short squeeze plays here? This is assuming that it still actually owns the stocks that the company reported to the SEC as of September 30, 2008.

For example, his company reportedly owns over 2 million shares of the New America High Income Fund Inc. (HYB), a junk bond closed end fund. This amounts to about 1.8% of the shares outstanding.

Hicks Acquisition Co. I Inc. (TOH) is another Madoff stock, of which his company reportedly owns over 500,000 shares or about three quarters of a percent of all the company's outstanding shares. It is interesting to note that according to Yahoo Finance, Hicks is a Dallas, Texas based company, founded in 2007, with no significant operations. Yet the company has a market cap of almost half a billion dollars.

For an Excel database of some of the significant shareholdings of Bernie Madoff, which can be downloaded and sorted, go to WallStreetNewsNetwork.com.

Disclosure: Author does not own any of the above.

Comments

[Tahoe:]

interesting view. Thanks for the access to the db. I had thought that BLM's business was being sold? would that not include the holdings? Maybe I totlally misunderstand how the unwinding of this scheme will occur? Certainly intriguing from many different perspectives. Revolting in others.

Jan 12 08:40 AM

[Tradermike:]

TOH is a spac, cash in trust looking for an acquisition target, yahoo finance is a weak tool to be relying on

Jan 12 07:22 PM

[sr9web:]

Share prices dropping causes a short -squeeze?...

Where did you learn that?

Jan 12 10:48 PM

[bobbobwhite:]

In the Madoff holdings page, I noticed TheStreet.com in Madoff's holdings. Hmmmmm. Maybe he is Cramer's uncle? It could happen.

Also, did Madoff hold all of these long throughout? If so, what a total dummy as well as a crook.

Jan 13 12:32 PM

[Charles H. ...:]

Holdings my a**. By now we all know he was holding nothing.

On January 17, 5 weeks ago and 5 days after this post, I predicted his vapor-portfolio, saying:

It’s beginning to look like Bernie Madoff’s business model had less in common with a hedge fund or investment management firm than it did with an online virtual reality game. Sort of a Sim City for investors. The money sent in was real: everything thereafter was from Oz.

But that was bupkus. Virtual reality money. Sim City money. Monopoly money. In the real world, it didn’t exist except in Bernie’s bank account and a computer program.

Feb 20 07:06 PM

[Charles H. ...:]

[sorry, I hit enter too soon]
Holdings, my a**. By now we all know he was holding nothing.

On January 17, 5 weeks ago, I predicted this, saying:

"It’s beginning to look like Bernie Madoff’s business model had less in common with a hedge fund or investment management firm than it did with an online virtual reality game. Sort of a Sim City for investors. The money sent in was real: everything thereafter was from Oz.

But that was bupkus. Virtual reality money. Sim City money. Monopoly money. In the real world, it didn’t exist except in Bernie’s bank account and a computer program."

Read the full post at
trustedadvisor.com/tru...

This is in fact much scarier than previously thought. It's one thing for the regulators to get outsmarted by smart fraudsters with massive millions and terabytes. It's quite another to flunk Auditing 101.

Ask the IRS. Ask the GAO. Ask a regional accounting firm. You take a transaction, and you follow it upstream.

Madoff's genius lay in knowing precisely where the gray areas were, where no one had jurisdiction. But even that would not have worked if someone simply had the instincts of a gumshoe, a basic auditor, the innate suspicion of a good auditor.

He played us all for fools, knowing we had created institutions that were trapped by their own checklist procedural approach to "regulation."

Feb 20 07:09 PM