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A Glimpse Of Paulson Dumping Stock: Fund's Sales Of LNG Accounts For 12.4% Of Last Ten Day ADV

Tyler Durden's picture




 

Paulson is now in stock dumping mode. Whether it is on a name by name basis or wholesale is unknown right now, and will need to wait until February 15 for confirmation, although we are confident that what Paulson & Co.'s 8 different funds/accounts are doing in Cheniere Energy (LNG) in the past 10 trading days is indicative of a broad based portfolio profit-taking, that has started on November 16 and is ongoing through today. As Paulson had a sizable stake in LNG, he was obliged to file 13D's. That is not the case in most of his other positions. And courtesy of the last two 13-D (here and here), we have a glimpse of what an active dump looks like for John Paulson. Between 7 different funds and separately managed accounts, Paulson has taken his stake in the firm from 7.5 million shares to just over 2.8 million. On the first day of the dump, Paulson sold 2 million shares, representing 20% of the ADV, as the VWAP algo was working overdrive. Subsequently, Paulson sold slightly less, averaging just under 500,000 shares a day, and representing less and less of the average daily volume, until we another volume pick up today, when the selling popped to a 4 day high. Altogether one fund's selling was responsible for 12.4% of the average volume in the stock in the past two business weeks. It seems Paulson believes he has overstayed his welcome in the LNG terminal operator, in which he built up an initial 4.7 million share stake in the June 30, 2008 quarter at around $5.50/share, and then buying another 2.8 million shares in the end of 2008 at a far lower price. Then as a result of the recent surge in the name, he has decided to bail. As noted earlier, we are confident this is not an isolated case of derisking, and is likely matched by many other Paulson positions, especially in winning names in which the billionaire is now locking in profits.

 

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Mon, 12/06/2010 - 23:58 | 784593 monopoly
monopoly's picture

I have no idea when this insanity will end and I doubt Paulson does either. So, all I do is own core miners, gold, silver and cash. Maybe a trade or two around that, but that is all. But end it will, that I know.

Am not that smart to get out of "AMZN PCLN NFLX or C at the right moment.

Tue, 12/07/2010 - 00:22 | 784635 egdeh orez
egdeh orez's picture

Hey Tyler,

Just wondering why you think LNG is only one of the many names that Paulson is selling?

Tue, 12/07/2010 - 00:28 | 784647 Julia
Julia's picture

Perhaps because Paulson is no doubt dumping BAC? Just a hunch...

Edit--and then I read lower on the thread and Tyler answered it just as I suspected.

Mon, 12/06/2010 - 23:59 | 784596 Cursive
Cursive's picture

Hehehe.  Can the FRB/PPT hold it up long enough for the whales to get out?  Last one out of the pool is a rotten egg.

Tue, 12/07/2010 - 00:01 | 784601 mikla
mikla's picture

+1

When only the Fed is buying, you've got to think about getting through that exit.

Tue, 12/07/2010 - 00:02 | 784602 RobotTrader
RobotTrader's picture

Paulson is probably unloading resource stocks and pre-positioning to buy a bunch of beaten down bank stocks.

Money NEVER leaves the casino.

It simply goes to another table.

 

Tue, 12/07/2010 - 00:09 | 784611 Tyler Durden
Tyler Durden's picture

He was selling bank stocks at the end of Q3. He is likely selling even more bank stocks in Q4.

Tue, 12/07/2010 - 00:15 | 784619 whatsinaname
whatsinaname's picture

cramer says not to worry..

Tue, 12/07/2010 - 00:15 | 784625 Spalding_Smailes
Spalding_Smailes's picture

He should buy

Deutsche Bank AG (USA) 

(Public, NYSE:DB)

Tue, 12/07/2010 - 00:19 | 784631 arm50
arm50's picture

did you know your boy Sack worked at macroeconomic advisors prior to moving to the fed? http://www.ny.frb.org/aboutthefed/orgchart/sack.html

Tue, 12/07/2010 - 01:41 | 784736 Tyler Durden
Tyler Durden's picture

That comes as a complete surprise

Tue, 12/07/2010 - 08:23 | 784956 AccreditedEYE
AccreditedEYE's picture

lol

Tue, 12/07/2010 - 12:44 | 785889 arm50
arm50's picture

Remember this speech? Given at the Marriott that is literally on the same street as PIMCO's HQ just weeks prior to QE@ launch. http://www.newyorkfed.org/newsevents/speeches/2010/sac101004.html

Tue, 12/07/2010 - 00:14 | 784623 Tahoe
Tahoe's picture

+1

 

the shell game continues ..... until it doesn't.  And in what time frame?  Or will it become perpetual?  Or is that really impossible?  And the glitter is where the real value is?  Continue the music for now ..... watching and learning.  Trading on.

Tue, 12/07/2010 - 03:06 | 784796 Spitzer
Spitzer's picture

Internet stocks did not lead us out of the last recession so I doubt bank stocks will lead us out of this one.

Tue, 12/07/2010 - 00:10 | 784613 Gaston
Gaston's picture

A stock I once owned, sold regretfully bought back and dumped it again somewhere around $2.30 or so, along with KOG and some other names which have really outpreformed, i find these stocks all the time but have no patience, its a shame cause I could have really used that money now. Live and learn, I'm out of the stocks and could careless if they go to the moon, i'll hold my PM's and say I played their game.

Tue, 12/07/2010 - 00:23 | 784636 Blano
Blano's picture

OT:  whether you agree or not, here's a foreclosure story y'all might enjoy.  Grandma's foreclosure case has lasted through 2 marriages, 3 recessions and 4 presidents.  Last mortgage payment made in October 1985.

 

http://finance.yahoo.com/loans/article/111500/the-25-year-foreclosure-from-hell

 

 

Tue, 12/07/2010 - 00:24 | 784639 Paul Thomason
Paul Thomason's picture

I wonder if he has a condom on when he is 'dumping'?.

Tue, 12/07/2010 - 00:58 | 784682 Oh regional Indian
Oh regional Indian's picture

When big boys make big moves, they are doing so with far forward or deep inside information.

I cannot and do not subscribe to the notion of their brilliance. I only subscribe to the notion of their deep insider status and it's accompanying "suck-cess".

Even trying to follow the big boys on momentum trades is a losing proposition because you really have no good idea of the true reason behind their moves. Momentum will carry you farther because you'll hit the brakes late.

All this tells me is that the stock-market is going to be toasted to save the bond market. Would love to see his exposure to fixed income. Imagine having his insider insight into rate moves coming, which they, in-evitably will.

A Vlocker surprise is coming, with much accompanied hand-wringing and gosh we had to...guess who'll be holding the short end of that stick.

Edit: Interesting, a minute after posting this, I found this vial John Nadler commentary...

very apropos...

That said, Mr. Bernanke vehemently defended his team’s recent policies by alluding to the dire scenario that would have resulted, had no stimulus measures been undertaken. He also threw a bucket of cold water in the direction of the Sarah Palin-flavored allegations that money is being “created out of thin air” and that the consequences of all of this accommodation imply inevitable hyperinflation.

“We’ve been very, very clear that we will not allow inflation to rise above 2 percent. We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. That time is not now.”


 

The time is not now, sure. It could well be the day after tomorrow though.

ORI

http://aadivaahan.wordpress.com 

Tue, 12/07/2010 - 01:00 | 784695 Spalding_Smailes
Spalding_Smailes's picture

We will see ORI, the bond market has lots of deflation looming. Not sure if they will move rates up the pension funds need stocks up ....

 

........"If you look at the CMBS (commercial mortgage-backed securities) over the next five years, "about 65 percent of the debt" will be maturing. "You can't replace the same amount of debt in today's market with the amount of debt that is maturing—its going to need more equity," he concluded."My Take:

Scott Rechler pretty much nails it. The numbers here are staggering.

As you can see above in the video, the commercial securitization market has just about disappeared. There were only $17 billion in commercial seceritizations done from 2008-2010 versus a whopping $602 billion fom 2005-2007

Based on Rechler's calculations 65% of the loans are about to mature.

As Rechler explains, most commercial loans come to duration in 5 years. Some need to be rolled over in as little as 1-2 years.

Based on the numbers above, this means about $400 billion in commercial loans needs to be rolled from 2010-2012. This total could be a little higher if some of the 2004 loans are included.".....

Tue, 12/07/2010 - 01:17 | 784718 Oh regional Indian
Oh regional Indian's picture

Good point SS, but with adequate propaganda (overt and covert), sheeple can be prepared for anything.

Look at how blithely(!) Ben Bukkake disgorges official numbers on inflation and jobs to validate his positions.

No one saw Vlocker's moves coming in the 80's and whether they were good, bad or ugly is still contentious.

If the Grabbermint can essentially take over Residential RE, why won't they do the same to CRE? 

That one is easier solved with money (ie. QExxx), the Bond market however is somewhat more solidly stuck to global dependencies/contagion.

 

ORI

http://aadivaahan.wordpress.com

 

 

Tue, 12/07/2010 - 01:31 | 784728 Spalding_Smailes
Spalding_Smailes's picture

Your right QE 4 or 5 will deal with more shadow deflation. The rate moves hint/test flight will spill forth way before any move by way of jawboning. JMO

Tue, 12/07/2010 - 02:08 | 784755 Caviar Emptor
Caviar Emptor's picture

V-shaped recovery! And a new expression for the 2010s (echoing the super-size me era of the 2000s): V-shape me! 

I see creeping risk aversion all around. This time there isn't one clear culprit like in the summer when it was Eurozone sovereign risk. It's pervasive signs coming from all 4 corners of the earth. Most are just pointing to a classic cycle top. But that's bad. Others are pointing to systemic risks. That's worse. 

Tue, 12/07/2010 - 02:55 | 784791 twittering as s...
twittering as stocktradr's picture

“Money NEVER leaves the casino. It simply goes to another table.” Not a very good trading plan. A good trading plan from the great trader Kenny Rogers. “You got to know when to hold 'em, know when to fold 'em Know when to walk away, know when to run. You never count your money, when you're sittin' at the table . There'll be time enough for countin', when the dealin's done. ” a trader trades a complete trading plan continuously making more money than one loses.

Tue, 12/07/2010 - 02:57 | 784793 redpill
redpill's picture

It's little wonder so many Wall Street vets have decided it's time to throw in the towel. Honest analysis doesn't get you very far anymore in an economy of fraud.

Tue, 12/07/2010 - 04:21 | 784855 drunkagain
drunkagain's picture

LNG is a POS. Their liquefaction idea hail-mary was a great pump to dump and get the hell out

Tue, 12/07/2010 - 04:39 | 784869 bingocat
bingocat's picture

At the end of last month, the entire position in Cheniere was 1/10 of 1% of Paulson & Co stockholdings (not even a rounding error in terms of portfolio risk over any given period). It has been a complete dog for most of the year (and the company has been pretty doggy for years). The stock rises almost 100% from late October and so some portfolio manager at P&Co decides to take it off the pad, saying "good riddance."

I am not sure how one can use that info and read into anything about anything else Paulson has. Almost any other information one had would have more import to the fund's risk management, investment direction, or thematic interest. If Paulson wants to take equity risk off the table, a tiny slice of his $5bn+ in bank exposure would have more effect, and be a lot easier.

Tue, 12/07/2010 - 04:52 | 784875 AGoldhamster
AGoldhamster's picture

Selling due to redemptions? Especially by those who  are afraid of the wikileaks related BAC news in Jan?

+ over the next few days and latest this weekend I have several indicators and cycles peaking for a week or two

+ rumors of another chinese rate hike over the weekend

+ OE next week

+ thinner market conditions

Anyway - at least I intend to go flat and book profits until latest Friday. Also in paper PMs btw. Possibly and likely Thursday - as Friday tends to be somewhat choppy and seems to be Blythes preferred trading day recently.

Tue, 12/07/2010 - 07:39 | 784925 wiskeyrunner
wiskeyrunner's picture

Oh look the stock index futures are up, guess more debt is what the market like right now.

Tue, 12/07/2010 - 07:55 | 784936 primefool
primefool's picture

But not a patch on Mr Gonos' achievemnets - eh? Lookey here - da Zim markit was up wot a million purshent or so? Aint shabby.

Tue, 12/07/2010 - 08:52 | 785004 alpha60
alpha60's picture

slow news day?

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