Hedge fund slams Fortescue
PROMINENT hedge fund manager and short seller Jim Chanos has singled out Fortescue Metals as a ''value trap'' stock, telling a New York conference that shares in billionaire Andrew Forrest's company will fall ''materially''.
In a presentation to Grant's Spring Conference, a private investment forum, this month, Mr Chanos, the boss of Kynikos Associates, told investors he feared iron ore miner Fortescue had ''a somewhat promotional management team''.
He singled out the company headed by billionaire Andrew ''Twiggy'' Forrest as the global example of a ''value trap'' in the ''iron ore rush'', adding that he was betting against the company.
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''In our hedge fund, we are long BHP v Fortescue and others,'' said Mr Chanos, according to an account of his presentation in Grant's Interest Rate Observer, the publication of the conference organisers.
''BHP is a much more stable company. They see the cycle more than others do, they've been through it more than others have and it's been an interesting hedge for those that play it that way.''
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