Given the shaky finances, bargain basement share prices and need to plow billions into network upgrades and handset subsidies among second-tier industry players, Paulson & Co. staked a multi-billion dollar bet on wireless industry consolidators.
Paulson & Co. has even had an influence on how the industry consolidates, after the $18 billion hedge fund gave crucial support to SoftBank's play for Sprint and T-Mobile's acquisition of MetroPCS, another top holding.
The fund, which made billions shorting the U.S. subprime housing market ahead of the financial crisis, could even be seen as adding a voice of temperance to wireless industry consolidation. Paulson & Co. could have turned wireless M&A into a frenzy given the number of vocal hedge funds investing in the sector.Hedge funds such as Paulson & Co. are often celebrated for winning macroeconomic bets like a subprime short, or panned for trades such as a faltering investment in gold and gold miners. Those trying to position ahead of industry trends would do well to also take notice when funds as large as Paulson and Glenview make trades across an entire sector such as wireless or healthcare. Other investors as notable as Warren Buffett-run Berkshire Hathaway (BRK.A), David Einhorn-run Greenlight Capital Management and Leon Cooperman-run Omega Advisors are also exposed to consolidation in either the healthcare or wireless sectors. -- Written by Antoine Gara in New York Follow @antoinegara
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