Kyle Bass: General Motors shares could touch $50, despite probe

Bass, founder of Hayman Capital and owner of a big position in GM, said he believes the automaker's stock could trade in the high $40s or even touch $50 a share in 12 to 18 months, more than $15 higher than current prices. Bass told "Squawk on the Street" that GM is one of the cheapest stocks in the market. He also said the government could find itself liable for claims related to faulty ignitions because it took over the company when GM filed for bankruptcy in 2009. His bullish stance on GM came as a vehicle safety group attributed 303 deaths to faulty air bags in GM vehicles. "When I look at this, this was not a bankruptcy," Bass said. "It was a government takeover of GM. It may very well be that the government is liable for the claims that the government is looking into. A lot of these claims were discharged in bankruptcy and the government ran the company for a while. I find it kind of silly." During his interview with CNBC, Bass also explained why his hedge fund increased its stake in nonbank mortgage servicer Nationstar Mortgage Holdings, a company under scrutiny from New York state banking regulators. Earlier this month, New York State Financial Services Superintendent Benjamin Lawsky demanded information from Nationstar about its portfolio and practices as his office looks at whether smaller, nonbank servicers can handle large numbers of mortgages.



Bass added that nonbank servicers such as Nationstar don't generate large numbers of complaints compared to the number of delinquent mortgages they handle. "The banks are almost three times worse at doing this and yet the regulatory inquiry is in the nonbank sector?" Bass said. "Ben Lawsky should focus on who the worst players are and not who the best are."

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.

Kyle Bass bought Argentine bonds last year

Kyle Bass said he bought Argentine bonds at 55 cents on the dollar last year and has no plans to sell even as global investors say there’s an 86 percent chance Argentina will quit paying in the next five years. “There’s huge opportunity in these bonds,” said Bass, who manages about $2 billion for Dallas-based Hayman Capital Management LP. “I know you can’t see that today, but today’s the time to be thinking about it.”

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.

Kyle Bass of Hayman Capital Said to Invest in General Motors as a Bet on Detroit

In December 2013, Kyle Bass took a stake in General Motors Co. (GM), said a person familiar with the matter, indicating further investor confidence in the auto industry’s recovery as the U.S. winds down its ownership role.

“Detroit is back. And GM could lead the way forward on the equity front,” the Dallas-based fund founded by J. Kyle Bass said in a presentation published on the website HVST.com. “GM equity represents one of the most compelling risk/reward situations of any large cap in the world today.”

The largest U.S. automaker should increase in value by more than 40 percent in 12 to 18 months, Hayman Capital said in the presentation. The stake in Detroit-based GM is one of the hedge fund’s largest investments, said the person, who asked not to be identified because the matter is private. Hayman declined to disclose the size of its stake.

The U.S. Treasury expects to sell its remaining 31.1 million GM common shares by year-end, depending on market conditions, the government said last month. The sale would come after almost half a decade of U.S. government oversight following its 2008 bailout and 2009 bankruptcy. Bass, known for his prescient bet against subprime home mortgages before the financial crisis, said the U.S. exit is a trigger for the stock. “The U.S. government will be out of the way before the end of the year,” Bass said yesterday in a telephone interview. “They’ve been a source of constant selling pressure in the equity this year.”

GM should “at least trade in line” with its auto peers, according to the Hayman presentation. Bass said that by his reckoning, GM trades at three times Ebitda, while Dearborn, Michigan-based Ford trades at 4.4 times Ebitda.

“A strong case can be made that GM should trade at a premium to the group,” Hayman said. Bolstering that investment argument are the company’s “unique position and strong underlying fundamentals, a best-in-class leverage to global growth markets, improving operational efficiency from ongoing turnaround efforts and an improving product cadence.”

Kyle Bass, an American hedge fund manager, is the Founder of Hayman Capital. He received extensive coverage in the financial press for profiting $590 million by short selling the sub-prime mortgage bond market, before that market crashed. In 2011, Bass initiated a huge position in Greek sovereign debt through CDSs. Media reports were that he could profit up to 650 times his investment should Greece default on its debt obligations.