Hedge Fund Reader : Hedge Funds attack the monolith Germany

Comments

August 27, 2005

Hedge Funds attack the monolith Germany

Mercedes’ parent DaimlerChrysler may be the new victim to fall pray to the Hedge Funds in Germany, after the funds grabbed approximately 20 per cent, buying a major chunk of about 35m shares sell-off by Deutsche Bank since late July this year. The Anglo-Saxon hedge funds are giving a tough time to DaimlerChrysler’s new incoming Chief Executive Officer, Mr. Dieter Zetsche. The funds have strong plans to shut down Mercedes’ tiny 600cc Smart car venture, which has racked up losses an estimated €3,300 per car. The Smart car venture was initiated in 1998, two-door and four-door model which has had cumulated losses of approximately €3.3billion till date. Although DaimlerChrysler does not seam to be subdued by the funds and might only go for a partial closure of the Smart car venture by phasing out the Dutch four-door and just retain the two-door model. Germany has seen a major shake up in its various household names in the recent past. Toscafund and Lansdowne, funds based in London have strengthened its stronghold on Commerzbank AG. U.S.based hedge fund Atticus and U.K.based TCI created a furor in Germany's financial circles when they led a shareholders revolt and led to and inquiry by Germany's stock watchdog BaFin when it toppled over Germany’s Stock Exchange, Deutsche Bourse’s Chief, Mr. Werner Seifert. Germany’ organizations have to be more proactive in its operations or they would be reduced to dust, since they hedge funds are always on the prowl. Business.Telegraph Reports:

The share price has slumped by half over five years as the Chrysler division bled funds, but may now be undervalued given the sales value of the constituent parts - including its 30pc stake in EADS, the aerospace parent of Airbus. Chrysler has been nursed back to health by Mr Zetsche.

--
Did you enjoy this post?

August 27, 2005 in Gossip & Scandal | Permalink