John Paulson's Hedge Fund Position Updates

According to SEC filings by Paulson & Co. on Friday, billionaire hedge fund manager John Paulson has increased his position in Citigroup (C) to $1.4 billion dollars, roughly 300 million shares. Paulson's firm has an average cost of $4.84/sh on the holding. Citigroup made a positive move in after hours trading on Friday after the filing had been reported. Shares traded up 2.75% to $4.16/sh.

These recent hedge fund positions are based on the 13F filed by Paulson & Co. on 11/13/09 (which includes positions held as of 9/30/09). According to the report, the hedge fund also reduced positions in Bank of America (BAC), Goldman Sachs (GS), and JP Morgan Chase (JPM).

Over the past week there has also been talk about the money manager taking on an increased position in Cadbury Plc (CBY), amidst rumors of a potential Kraft Foods (KFT) deal. The fund has acquired a 2.54% stake in the confectioner, and is hoping that Kraft, which launched a hostile $16.2 billion bid for Cadbury on Monday, will have to raise its bid on the deal.

For more on John Paulson and his legendary profits, you might want to check out the new book The Greatest Trade Ever by WSJ writer Gregory Zuckerman. I have not had a chance to read the book, but according to Paulson, "It contains numerous inaccuracies and fails to capture the essence of the credit bubble." Critique aside, it just might make for a more interesting story for those readers who aren't particularly thrilled by credit default swaps and the like.

Disclosure: No Positions

Comments

[apppro:]

He's a bottom feeder not an investor.

Nov 15 08:56 AM

[bobbybutte:]

As a person who has achieved financial independence SOLELY from allocating capital and have writtena book and newsletter based on buffett's teaching let me add a few things

Paulson still has alarge stake in BAC and he is betting that Kraft will buy Cadbury

I believe kraft will buy Cadbury but not at the price cabury wants

Nov 15 09:49 AM

[George /Mis...:]

It would seem that Paulson's $1.4B increase in CITI (C) is designed for lower cost averaging the stock to $4.84, when the present stock price is considerably lower.

Is Paulson's interest in the stock going long or is designed to short it down the road big time?

Nov 15 10:45 AM

[bobbybutte:]

why would paulson short it?

He knows the government has sucha large stake that he feels it will be fine long term

Nov 15 10:51 AM

[Stockmajor:]

Citi will earn their way out of current problems. They will also pay back the TARP when they and the government agree it is time to do so. They could do so now without dramatically hurting their ratios. Have you noticed how much cash they have? I bet they will have considerable more in the fourth quarter report in January.

The tax assets writedown is a non-issue for this bank. And I believe Citi will eventually reduce the amount of shares outstanding. What if they simply buy the shares from the government?

So, look for Citi to go to much higher values over the next few years. If it just goes to $12/share, you triple your investment! And I believe it will do much better than that.

Nov 15 04:31 PM

[User 513353:]

It's clear that the government won't let it fail. It's also true that Citi's fundamental is worse than BAC, WFC, JPM. The stock is not necessarily a bargain right now, and the ride will be bumpy. Hold it for a few years, however, chances are it's a multi-bagger.

Nov 15 05:01 PM

[Gary A:]

He won't be fine long term. JPM would prey on Citibank like a vulture on a carcass if conditions are right. The Fed isn't talking about dismantling the biggest banks for nothing. If the economy sinks more, which I believe the Fed knows will happen, these banks will be zombie like for years. And maybe worse. There are a lot better stocks to invest in,IMO.

On Nov 15 10:51 AM bobbybutte wrote:

> why would paulson short it?
>
> He knows the government has sucha large stake that he feels it will
> be fine long term

Nov 15 08:30 PM

[alphabg:]

Why are we talking about a 1.4B increase? Paulson bouth a 2% stake on Citi on August 27. It was all over the news. (2% of 22b shares oustanding is about 440m shares, Paulson reported stake as of end of September is only 300m) so did he actually increase or decrease his stake on Citi?)


On Nov 15 10:45 AM George /Mississauga/Ontario wrote:

> It would seem that Paulson's $1.4B increase in CITI (C) is designed
> for lower cost averaging the stock to $4.84, when the present stock
> price is considerably lower.
>
> Is Paulson's interest in the stock going long or is designed to short
> it down the road big time?

Nov 15 09:28 PM

[davidbdc:]

Whether you agree with him or not, you have to admit Paulson is on a hot streak.....so perhaps a few thousand shares of C at prices less than what he's paid would be a decent bet.

Nov 16 07:34 AM

[George /Mis...:]

On Nov 15 09:28 PM alphabg wrote:

> Why are we talking about a 1.4B increase? Paulson bouth a 2% stake
> on Citi on August 27. It was all over the news. (2% of 22b shares
> oustanding is about 440m shares, Paulson reported stake as of end
> of September is only 300m) so did he actually increase or decrease
> his stake on Citi?)

If what you say is correct of the 2% or 440m shares purchased in August and he ended up with 300 in September a drop of 140M shares and turns around and buys an additional $1.4 B worth of (approx 340M) shares, he has increased his position.

So what is your point?

Nov 16 07:37 AM

[Cramer #1:]

Citi Now 33.6% Gov’t Owned… Reverse Split Seems Imminent (C)
Posted: September 3, 2009 at 9:46 am

Print Email Subscribe Free Newsletter Follow us on Twitter 24/7 Wall St Real Time 500 Citigroup, Inc. (NYSE: C) is going to have a very active day ahead of it. The troubled banking giant has just announced that its common stockholders approved the three resolutions submitted in its Common Proxy Statement dated June 18, 2009. If Citi does not need a reverse split just to chop down the number of shares, then no company ever did. The company has been authorized to effect a reverse split, although it is not required to, in the new situation. And Uncle Sam now owns 33.6% of the company.

The approved resolutions increase the number of authorized shares of Citi’s common stock to 60 billion shares. This also eliminates the right of the holders of common stock to vote on any amendment to the restated certificate of incorporation that relates solely to the terms of any series of preferred stock.

The approval was authorized, but again does not require, Citi’s board of directors to effect a reverse stock split at one of seven ratios any time prior to June 30, 2010.

The warrants to purchase shares of Citi common stock issued on July 23, 2009 to the U.S. government and certain private holders have become null and void. Tax payers should not be offended though, as Uncle Sam is now the largest shareholder….

Citi can now convert the U.S. government and certain private holders’ interim securities to common stock to complete the previously announced share exchange and the mandatory conversion will be effective at the close of on September 10, 2009. After that Citi will have approximately 22,880,304,796 shares of common stock outstanding (over 22 billion, ouch). The U.S. government will own 7,692,307,692 shares, a figure which comes to 33.6% of the outstanding shares of Citi.

Citi is bouncing along with many other financial stocks. At 9:37 AM EST we have seen over 80 million shares trade hands and the stock is up almost 5% at $4.78.

JON C. OGG
SEPTEMBER 3, 2009

Nov 16 12:52 PM

[Cramer #1:]

According to published reports on Aug 27th he bought 2% of C shares.
Link:
www.businessinsider.co...
www.nypost.com/p/news/...

(Google search: Paulson Citi)

2% of 22Billion outstanding C shares is about $440 million shares.

According to latest breaking news he had 300million shares as of Sep 30th.

Does anyone know how many he has now?
(we will know in Feb when he files with SEC)

Gambling on what a hedge fund did 2 months back and not knowing what it is holding now is risky

Nov 16 12:54 PM

[Nettligent:]

Stocks are cheap for a very good reasons. There are more problems for speculative GM, Citi Group and BoA in 2010.

Nov 16 03:31 PM

[Al Ramy:]

no need to rehash, recycle news made available by others.

Nov 16 03:47 PM

[smallish in...:]

Why does he want to leave GS ?

Nov 17 08:09 AM

[T. Boone:]

Just a word of advice for anyone who is thinking about investing in those companies...don't be sucked in to investing in something just because he is. Sooner or later using that strategy, you will get burned badly. I am speaking from experience here.

Hope this helps...
Boone

Nov 17 10:41 AM

[Alex Khande...:]

Quick Update. John Paulson just announced that he is going to start a new gold fund in which he is personally going to invest $250 million. This institutional support of gold prices may push the commodity even higher.

Nov 18 12:57 PM