IPO Blank-Check Bounce
Amaranth's massive $4 billion bad bet on natural gas prices is creating shock waves in the market for so-called blank-check IPOs.
Amaranth, a hedge fund that once had $9 billion in assets, was one of the biggest investors in initial public offerings by fledgling companies in search of a business plan. The investment banks underwriting blank-check offerings had come to count on Amaranth to take 5% to 10% equity stakes in these speculative stock deals.
But that was before Amaranth's energy trading desk, led by Brian Hunter,
A margin call is a demand from a broker that a hedge fund either post more collateral for a stock loan, or immediately pay off the debt that's due. In the wake of last week's bad natural gas trade, Amaranth has been fending off margin call after margin call.A market source says Amaranth has sold stock in some of the blank-check companies it invested in on Monday and Tuesday. These companies include Acquicor Technology (AQR), India Globalization Capital (IGC), Star Maritime (SEA) and Healthcare Acquisition (HAQ). An Amaranth spokesman could not be reached for comment.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV