BSkyB Hedge Funds
Hedge Funds Burned by News Corp. BSkyB Bid Collapse
Hedge funds are reportedly losing big off news of the abandoned bid by News Corporation to purchase BSkyB. Many hedge funds seem to have taken heavy losses because they viewed the company as such a prime target for an acquisition and now that the bid has fallen through they have taken the hit.
Hedge funds have suffered one of their worst setbacks in years, losing tens of millions of pounds by betting that Rupert Murdoch's News Corporation was on the verge of taking full control of BSkyB.
Short-term speculators expected to make a killing by investing in a company viewed as a prime bid target, but instead have seen shares in the satellite television company plunge.
One trader said: "It's a bloodbath out there. The hedgies have dumped their holdings and some of them will be nursing big losses."
With News Corp bowing to political pressure by abandoning its plan to take full control of BSkyB, more selling is possible in the days ahead. Brokers estimate another 100m BSkyB shares are in the hands of "arbs", funds that specialise in opportunities presented by mergers and acquisitions. Source
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