In the investment world, the name Kyle Bass is associated with making big bucks. Bass belongs to that rare group of high-profile investors that small investors watch and try to imitate. Bass got his reputation when he bet the subprime mortgage bond scheme was going to fail back in 2008. Bass was one of the few Wall Street mavens to bet the bonds were worthless, and he was right. Bass and his company, Dallas-based Hayman Capital Investments became front page news in investment journals, and it was game on for Bass.
Eight years have passed since Bass made a name for himself. Hayman Capital is one of the top hedge fund investment firms in the nation and Bass is frequently asked what the next best investment is going to be by the media. Kyle never turns down an opportunity to voice his opinion, and that has been a double edge sword for the notorious short-selling genius. One of his latest ventures involves a large Grapevine, Texas real estate lending firm. The company, United Development Funding, has been riding high for several years, and Bass believes the company is overvaluing its assets to keep the momentum going.
United Development Funding stock has lost more than 50 percent of its value over the last six months, and Bass thinks the company is misleading its investors. Bass has been short-selling the United Development stock and making a killing. According to an article posted by bizbeat.DallasNews.com, Bass thinks the company is on the verge of a collapse, and he wants to make money on that collapse.
This is not the first time Bass has been in the news for short-selling stock. Recently, Bass teamed up the patent troll Erich Spangenberg. Spangenberg has a reputation of being a trouble-stirring force in businesses, and Spangenberg’s most recent target is the drug companies. Bass short-sells drug companies stock when Spangenberg’s organization makes claims about price gouging. It’s a simple scheme that is producing excellent returns for Bass. The ethical aspect of the scheme has been questioned, but Bass says the drug companies are in it for the money, and so is he.
The ethical behavior of Bass and Hayman Capital has been a conversation starter for the last couple of years. American Sniper Chris Kyle’s widow said her transactions with Hayman Capital have been unethical. Bass and his relationship with the former President of Argentina is another misstep according to investment insiders. Bass is friendly with former President Christina de Kirchner and that relationship took precedence when Bass was asked about de Kirchner’s position on the government bond default issue. Bass sided with de Kirchner and against his peers in the investment industry.
Some investors think Bass is losing his magical investment touch, and others say he never had one.