In a letter obtained by ValueWalk last month, John Paulson stated that he was very bullish on Delphi Automotive plc NYSE:DLPH" target="_blank" rel="nofollow" >(NYSE:DLPH). The letter, which contained 102 pages of commentary from Paulson specifically listed Delphi as an attractive investment.
Paulson stated the following in the letter:
The letter obtained by ValueWalk sources was dated February 15th 2012. It confirmed that Paulson owned Delphi debt, which would not be reported in SEC filings. Paulson noted their bullish views on Delphi common equity.
According to a Form 4 filed with the SEC today, Paulson sold 1,105,000 common shares of Delphi Automotive plc at $31.96 per share. The form does not require Paulson to state the reason for the sale. In addition, it will not include any debt which Paulson may have sold.
However, Paulson still owns about 50 million shares of the company and an undisclosed amount of the debt. It will be interesting to see whether Paulson is selling the equity due to forced redemptions from investors or whether Paulson now is finding better value in other areas.
As we noted very recently, Paulson had a bad February, with the Paulson Advantage Plus Fund down 1.5% and Paulson might feel the need to hold more cash before investor redemptions might force it.
We also noted the strange and dangerous strategy, which Paulson plans to employ in 2012.