How much did SAC lose on Volkswagen?

If it were possible to figure out what positions SAC is trading just by going through the Form 13s, why would anyone bother to pay them those astronomical fees that Steve demands?

Everyone has heard of Titty Capital right? Well my friend who used to work as a trader heard it from his friend who used to be a prime broker that Titty would engage in maneuvers to throw people off their scent using their periodic 13-Fs as a tool. Just before the last trading day ended every quarter, Titty was said to swap their portfolio with a diversified dummy portfolio of equivalent value and then swap back their original positions just before markets opened the next trading day. With just a simple swap agreement, Titty actually got to mess around with market by reporting false positions and it drove everyone nuts. The SEC investigated time and again but Titty was such an active trader and they turned their positions over so much that there was nothing anyone could say about their end of period activities. You could say that what Titty does is against the spirit of the law, but that is not the same thing as saying that Titty broke the law. But Titty is Titty and we all know what they are like. Those guys are in a class of their own.
 
How do you all know SAC had any exposure to Volkswagen at all?

Just another thread that reeks of hubris, schadenfreude and analysis based more on assumptions than on facts.

Here's some fact for you: Einhorn was short VW and long Porsche (probably among many dozens of other positions) and he finished October -12.7%, -24% YTD.
 
Quote from makloda:

Here's some fact for you: Einhorn was short VW and long Porsche (probably among many dozens of other positions) and he finished October -12.7%, -24% YTD.
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If you right, then there are massive losses elsewhere. :p
 
hi, kinda new here :)

can someone explain to me what happened and why? this is what i understand thus far - i'm using made up numbers for easier illustration:

1. porsche had 40% stake in vw - everyone knew this

2. porsche bought options to buy another 35% from some banks who owend 35% - porshe and banks new this

3. meanwhile some funds shorted - e.g. fund A 5% and fund B 5%

4. porsche announced to all that they have warrants for the 35%

5. some "other" entity owns the "last" 20%

6. therefore we have 40 + 35 + 20 = 95% >> 5% left for the funds to cover their 10% short positions

basically, de facto, some other "group" entitiy X is expecting to receive 10% stock?

when do the funds have to "deliver" the cover?

did the funds race each other to that last 5% bidding up the price?

how did the warrants in #4 execute - some handshake over bier, or some other mechanisam?

appologies if these questions seem trivial :)
 
A move like this is more likely to affect the activist investor funds who have large concentrated portfolios. The ESLs, Greenlights, Pershings, TCI. I dont think SAC is part of that group

One black swan and your finished because you dont have enought diversification.
 
What makes you think those guys don't have enough diversification? I don't think Ackman, Einhorn etc. would bet 25% of their portfolio on a single idea.

The Top 10 (!) long positions of another big value oriented activist fund (Third Point LTD) represent 22% of their assets. The top 3 positions maybe 8% (this is just a guess on my end).

Third Point's top 10 short positions are even only 11% of total assets, i.e. they are less concentrated among their shorts than on their longs as losses on single short positions can be larger than 100%.

One short idea that blows up in their face doesn't mean it's game over.
 
Quote from makloda:

What makes you think those guys don't have enough diversification? I don't think Ackman, Einhorn etc. would bet 25% of their portfolio on a single idea.

The Top 10 (!) long positions of another big value oriented activist fund (Third Point LTD) represent 22% of their assets. The top 3 positions maybe 8% (this is just a guess on my end).

Third Point's top 10 short positions are even only 11% of total assets, i.e. they are less concentrated among their shorts than on their longs as losses on single short positions can be larger than 100%.

One short idea that blows up in their face doesn't mean it's game over.
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When a short blows up at a rate of 385% rise in a few trade days you could lose far more than any long position would gain in a hedge. A bad short is unlimited in the losses incurred.
 
Quote from patchie:

When a short blows up at a rate of 385% rise in a few trade days you could lose far more than any long position would gain in a hedge. A bad short is unlimited in the losses incurred.
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Absolutely. The only way you'd get a rise of that magnitude out of a long position, w/b with a BB or some such thing you couldn't put any money in. But one bad short, and you're toast.

Ask yourself these questions:

Why did it take this long for a short to blow up like this?

Why did it take a government sting to force it?

The answers, I believe, is they had everyone in their pockets. The Germans, real leaders in the Lichtenstein situation, want it over, and have only started what I believe are Western Govt's trying to get a handle on runaway financial disaster. They see this for what it is, Pandora's Box, and although it's too late, they are trying to get a handle. Think what you want of the method. We have no say. I am enjoying the result, however.
 
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