Forest Oil Corporation (NYSE:FST) is an oil company that is asset rich but debt laden in Texas. Previous public non-pro write-ups have done an average job of describing the company but failed to capture the events in last two months. This post will cover a highly crowded special situations trade by hedge funders that has backfired, resulting in a very attractive opportunity. This is the most interesting opportunity I've seen so far and is worthy to be a case study in a Greenblatt or Klarman book.
In a nutshell, FST has become a huge hedge fund battleground between credit arbs/ quant shops and fundamental investors, The arb trade involves shorting the corporate debt and buying stock to BLOCK...
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