John Paulson bets on Citi

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John Paulson, the man in the hedge fund industry the past few years, has made a big wager on Citigroup. According to a recent filing, he bought about 300 million shares for about $1.5 billion. At the same time, he dumped his $328 million stake in Goldman Sachs, and also sold off a portion of the $2.2 billion stake he held in Bank of America earlier this year, according to media reports. 

It’s unclear how he made off on these trades, though you would think he booked a sizable capital gain. Recall that the Paulson Recovery Fund was formed in 2008 to invest in financial firms hurt by the mortgage meltdown. Recall also that Paulson made $3 billion–some say $2 billion–in 2008 betting against subprime mortgage-related securities.

Some see him as the man with the golden touch in this area. This could be seen as a bullish signal for Citigroup, but while everyone agrees the stock has been battered down, it’s unclear if its fall is over. Some think the firm is in a kind of de facto receivership.

For more:
- here’s the article

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