It has been a profoundly negative news day for JP Morgan. After announcing a surprise $2 billion loss from a botched hedge last night, the stock dropped precipitously. It is currently down more than 8 per cent.But hedge fund manager Doug Kass of Seabreeze saw a unique opportunity. He bought the stock at $38.20 last night after the surprise 5 P.M. conference call.
In a post on The Street Kass explains his reasoning:
“I weighed the impact of the hit to earnings and to perception and concluded that it is fairly unusual to be able to buy JPMorgan Chase’s shares at only $4 over book value ($34 a share), especially in the face of an active $15 billion buyback.”
Kass goes on to explain that he doesn’t expect immediate profit, and that he’s has put the shares away as an investment.
Read the full post at The Street