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Hedge fund buys 9% Delphi stake
SEC filing shows Appaloosa Partners purchased 52 million shares of now-bankrupt auto parts maker.
October 12, 2005: 7:55 AM EDT
Some see GM bankruptcy risk rising
One analyst puts bankruptcy at GM at 30% after Delphi filing, but another disagrees.(Full story.)

NEW YORK (CNN/Money) - A New Jersey hedge fund has bought a 9.3 percent stake in Delphi, the auto parts maker that filed for bankruptcy court protection Saturday.

Appaloosa Partners disclosed the 9.3 percent stake in Delphi in a Securities and Exchange Commission filing Tuesday. The filing did not give a price that it paid for 52 million shares of the world's largest auto parts manufacturer, or when the shares were purchased.

Published reports identify Appaloosa as a fund that specializes in investing in distressed companies. David Tepper, its president, was the former head of junk bond trading at Goldman Sachs, according to the Financial Times.

Trading in Delphi (Research) shares were suspended by the New York Stock Exchange on Tuesday. Prices closed at 36 cents when trading was halted. While Delphi management had threatened that it was considering a bankruptcy filing for a number of weeks, shares were as high as $2.99 a week ago in midday trading on Oct. 3.

Share ownership tracking service LionShares reports that the filing puts Delphi as Appaloosa's 14th largest holding, equal to 1.1 percent of its portfolio. It also said that Appaloosa is now the No. 2 holder of Delphi stock, behind only Capital Research & Management Company, which manages the American Funds family of mutual funds. That firm has a 12.8 stake in Delphi, according to LionShare, but Delphi represents less than 0.01 percent of its overall holdings.

LionShares reports that fund manager Dodge & Cox had held nearly 74 million shares of Delphi as of June 30 but that its holdings are now listed at 48.6 million shares, putting it third behind Appaloosa's 52 million shares.

But Appaloosa wasn't the only institutional investor that made a big bet on Delphi in recent months.

LionShares reports that TIAA-CREF Investment Management owned 26.5 million shares in its most recent report. While that's down from the 28.9 million shares at the end of June, it's way up from a stake of 3.5 million shares at the end of 2004. TIAA-CREF was the No. 4 holder of Delphi, according to LionShare, although it represented only 0.01 percent of its portfolio.

For more on the Delphi bankruptcy and what it means for former parent General Motors, click here.  Top of page

Delphi Corporation
Hedge Funds
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