Fiat and Petrobras are top short picks among shortsellers

Article by Christian A., on November 22, 2012

Shortsellers have been monitoring Singapore commodities trader Olam as well as more popular names like Italian carmaker Fiat and Brazilian oil group Petrobras. At the Ira Sohn Conference in London's Mayfair district, the speakers included hedge fund managers: Chris Cooper-Hohn - the founder of The Children's Investment Fund (TCI), U.S. shortseller Muddy Waters, and Kynikos founder Jim Chanos.

They named stocks that they considered overvalued. This conference is also a charitable event that raises money for pediatric cancer research. Rich investors in the U.S. make it a point to attend this event for the chance to know who the industry’s top stock bets are. Muddy Waters’ comments have led to a drop in Olam's shares.

Meanwhile, TCI's Cooper-Hohn said Fiat was a good stock to short because it will have to raise more cash. A preferred tool of hedge funds, shorting refers to betting on a lower price for a stock. Cooper-Hohn said that Fiat is a “bad company” since it is spending too much cash and its debt levels were worse than the market though.

He explained that people would consider its “net debt of 5 billion euros, ex-Chrysler” but he thinks that the gross debt, which is getting closer to 20 billion euros, is what matters. He added that Fiat would have to “do a rights issues” as soon as it can. Last month, Fiat steeply reduced its targets for the next couple of years and said 2012 net industrial debt may reach 6.5 billion euros, as much as one billion higher than a previous projection. Fiat has yet to comment on this observation.

Topics: fiat

If you liked the article, share on:

Comments

Recommended

In September 27, 2016, Porsche initially filed for a patent that is the “Unique Active Rear Diffuser”. And earlier this week, on April 27, 2017, the United States Patent and...
by - April 29, 2017
The Insurance Institute for Highway Safety (IIHS) has given its Top Safety Pick+ award to the redesigned version of the 2017 Kia Cadenza. This was a result of excellent a...
by - April 29, 2017
It’s pretty neat if you possess something of an extraordinary breed like, say, the Pagani Huayra. There are after all just a total of 100 units ever been built by...
by - April 28, 2017
If you’ve ever visited an arcade, chances are you have already seen a Logitech G920 wheel. If that doesn’t ring a bell, it’s the steering wheel that you use when...
by - April 28, 2017
Toyota Motor Corporation disclosed that it will be bringing two of its Mirai fuel cell vehicles to China by October of this year. Tests will then be conducted on these...
by - April 28, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries