John Paulson’s Purchase of Walter Energy

John Paulson has recently purchased a large amount of shares in Walter Energy Inc. based in Tampa, Florida, which is the largest producer and exporter of metallurgic coal, premium hard coking coal, and coal bed methane gas, in the United States. These coal products are widely used in the petroleum and steel industries, and with the impact of the catastrophic weather around the world, demand for met coal increases with the need to rebuild.

Walter Energy, Inc. is set to purchase Western Coal on April 1, 2011, which will then make them the largest producer of metallurgic coal in the world. Being that the company already has the most open contracts for its product around the world they can monopolize in this situation. To date Walter Energy has earnings of more than $1.6 billion.

Mad Money’s investment analyst, Jim Cramer first suggested to consumers that Walter Energy deserved to be watched and was a worthwhile investment back in March of 2009. Since Cramer’s recommendation the share price for Walter Energy has risen 49%, and in February of 2011, have been holding steady and approximately $120.00. In light of the need for rebuilding around the globe these prices should only increase.
John Paulson founded Paulson & Co. in 1994, which is among the largest hedge fund companies in the world and is based in New York. John Paulson predicted the slump in the housing market despite the 2005 housing boom and invested in the credit-default buyouts of home loans. As the mortgage crises struck he quickly began making billions for him and Paulson & Co., helping to make John Paulson a billionaire seemingly overnight. John Paulson’s ability to predict and invest at crucial times is evident again in the purchase of $128 million stake in Walter Energy Inc. last year, adding significantly to the billionaire’s wealth.

With this merger and the continuing investments of Paulson and Co. in the energy market, the billionaire, John Paulson, is sure to see significant record breaking profits. Recently John Paulson and Paulson & Co. can be seen reducing the number of shares held in the banks that were instrumental in making him a billionaire in favor of the Walter Energy Inc. shares. As of November 2010, the billionaire John Paulson and Paulson & Co. the hedge fund giant, already had an estimated $33 billion in assets. This investment will most assuredly be an historical event.

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