market folly

John Paulson's hedge fund firm Paulson & Co has filed a 13D with the SEC regarding shares of Callon Petroleum (CPE).  Per the filing, Paulson now owns 9.5% of the company with over 21.59 million shares.  This is a brand new position for the hedge fund as they did not report any shares on their most recent 13F filing which discloses portfolios as of June 30th.

Paulson has gone activist and sent the board of directors a letter highlighting they oppose the acquisition of Carizzo Oil & Gas.  Paulson outlines a few reasons for their position: 1) Callon stock is down 36% since acquisition's announcement, 2) Co is offering an unwarranted premium to Carrizo, 3) Callon shareholders would be diluted, 4) Callon would no longer be a premium pure-play company, 5) Callon could be worth over 60%+ in a takeover, 6) Permian basin pure-plays remain attractive acquisition targets.  They go on to list other reasons as well.


Paulson & Co's Letter to Callon Petroleum

Embedded below is Paulson & Co's letter in its entirety.



You can also access it here.