John Paulson made billions of US dollars betting against American subprime mortgages. But Paulson’s ‘Midas touch’ finally looks to have turned to have deserted him – and an investment in Chinese forestry assets looks like taking the blame.
Various newspapers reported this week that Paulson & Co had sold its entire stake in Sino-Forest, accepting a loss of $500 million, reports Wall Street Journal. The Sino-Forest share price has collapsed since shortseller Muddy Waters published a report in early June accusing it of fraud (see last week’s issue, Talking Point).
Paulson had previously owned a 14% stake in the Chinese forestry firm, but had seen its value slide by 80% since the accusations were made public.
The hedge fund titan noted that he had sold all 35 million shares “due to uncertainty over Sino-Forest’s public disclosures and financial statements”.
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