Kyle Bass recently launched a full scale attack on United Development Funding saying that the Grapevine-based firm was swindling clients of their hard earned money. The attacks have negatively impacted the firm’s stock market prices. Since the attacks started in December, 2015, the firm has lost nearly $300 million of its stock market price.
Bass admitted to profiting from the woes experienced by united Development Funding by short-selling its stock. Bass has not refuted claims that he is profiting from UDF’s declining stock value. He said that his firm, Hayman Capital Management, is in the business of making profit. However, he reiterated that UDF’s defensive strategy of claiming that he is on a witch hunt is convenient. This is because it allows them to maintain plausible deniability of all accusations while failing to address the real issues raised.
According to UsefulStooges article about Kyle, http://usefulstooges.com/2015/08/24/kyle-bass-the-frantic-investments-of-a-desperate-gambler/, Bass launched his full-scale attack of the firm in January, 2016. He put out internet reports and sent letters to the media alerting them of the purported unscrupulous dealings at United Development Fund. He accused the firm of deliberately mishandling investor funds, making improper loans and overstating the true worth of its assets.
UDF’S Defensive Strategy
UDF has maintained that the recent attacks and accusations are designed to make its stock tank while making Kyle Bass millions. Hollis M. Greenlaw, UDF CEO, said that the firm beliefs that Hayman Capital will continue to issue misleading information. He further said that his fund remains focused on solely protecting all its investors by preserving their portfolios and defending the fund aggressively from outside, unfounded accusations.
Why Kyle Bass Launched Attack on UDF
Bass has said that his only reason for attacking United Development Funding was to raise public awareness about the firm’s dealings. He believes that his actions have saved many potential small scale investors from losing their money. He further said that it was his civic duty to protect the public. In addition, Bass started a website called udfexposed.com that he used to post all his reports about the company. He says that UDF improperly transferred monies between different funds while recklessly loaning out millions. He questions the decision of the company to concentrate a huge chunk of its loans on a few developers.
Kyle Bass and his Investment Strategies
Kyle Bass founded Hayman Capital Investments based in Dallas, Texas. He is infamously known to attack patents of huge pharmaceutical companies in order to profit from the short sell of their stock. This is because after challenging the company’s stock, it tanks allowing Bass and his associate, Erich Spangenberg, to profit.
Bass infamously attacked victims who died after using General Motors’ defective vehicles. The company was accused of knowingly releasing vehicles with defective power steering systems and non-deploying airbags to the market. However, Bass still vehemently defended GM simply because he had invested in its stock at the time.