As the world awaits the last day of the week and hopefully some clarity on the fate (or even state) of Portugal's Banco Espirito Santo ("BES"), which ultimately is controlled by the nebulous and unpublished accounts of the topmost HoldCo, Espirito Santo International, which in turn is merely a family investment vehicle of the Espirito Santo family as we showed this morning [3], moments ago BES issued two press releases [4]whose purposes was to provide an updated org chart of the troubled financial entity, and more importantly, to boast that as of today, the deepest of value investors, Seth Klarman's Baupost was a 2.27% investor in the company.
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Or rather, Baupost bought some 48.1 million BES shares on July 3 (bringing the fund's total holdings to 127.4 million shares) when the stock of BES was substantially higher. How much higher? Enough for Klarman to lose nearly 30% in one week.
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But while the ultimate fate of Klarman's investment is unknown, what is certain is that if BES and ESI's "Hail Mary" hope to restore confidence in the ailing financial conglomerate was the disclosure that a value/vulture investor is now present among the ranks of other investors, which as of July 8 also includes BlackRock, said hope will be promptly crushed, only to be replaced with the one thing the US president loathes the most: "cynicism."
