(Source: Associated Press/AP Online)
NEW YORK - The hedge fund run by John Paulson, who foresaw the distress in subprime mortgages and reaped billions by betting against the related securities, has bought about 168 million shares of Bank of America Corp., according to a regulatory filing Wednesday.
That makes Paulson & Co. the Charlotte, N.C.-based bank's fourth-largest shareholder, according to data from investor Web site LionShares. State Street Global Advisors is bank's top holder, with about 357.2 million shares, and Barclays Global Investors NA and Vanguard Group each own more than 200 million shares of the bank.
In a regular quarterly filing with the Securities and Exchange Commission required by hedge funds managing large sums, Paulson & Co. disclosed it bought nearly 168 million shares in the bank in the quarter ended June 30. Based on Bank of America's closing price of $15.93 on Wednesday, that implies a stake worth about $2.67 billion.
Bank of America, along with Citigroup Inc. and insurance giant American International Group Inc., is among the largest recipients of government aid. It has received $45 billion from the federal government's $700 billion bank rescue program.
Paulson also purchased 35 million shares of Regions Financial Corp., taking the No. 2 shareholder spot behind State Street and ahead of Barclays, and 17 million shares of Capital One Financial Corp., becoming that bank's fifth-largest shareholder.
Regions Financial, like other banks, is facing mounting loan losses as more customers fall behind on payments amid the lingering recession. The Birmingham, Ala.-based bank last month said its portfolios of residential homebuilder loans, home-equity loans in Florida and condominium loans continue to be the worst performing.
Bank of America shares rose 46 cents, or 2.9 percent, to $16.39 during aftermarket trading, while shares of Regions Financial rose 26 cents, or 5.4 percent, to $5.08 after-hours. Capital One shares rose 41 cents to $34.20, after closing the regular session up $1.03, or 3.1 percent, at $33.79.
Paulson also purchased sizable stakes last quarter in gold producers such as Anglogold Ashanti, Kinross Gold Corp. and Gold Fields Ltd., drugmakers Boston Scientific Corp., Schering-Plough and Wyeth, and server and software maker Sun Microsystems Inc.
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