Stake: $99.4 million
52-Week Returns: -51%
For our fifth and final Slim investment, we have Argentine oil company YPF (NYSE:YPF).
Shares of YPF were trading for more than $50 at the start of 2011, but have since fallen to under $15 thanks to Argentina’s nationalization of the company. The company came under government pressure when the nation became a net importer of oil despite YPF’s large reserves, and soon after, Argentina’s whole oil sector was declared to be in the public interest.
Slim received shares of YPF as collateral after a loan default — starting with around $345 million, or an 8.5% stake in the company. Now, Bloomberg reports just a $99.4 million stake … and it’s easy to understand that shrinkage. YPF has run up 25% since Slim’s stake was revealed in June, and Slim apparently sold out of most of his position, putting him on the right end of this deal.
Investors should take the hint and stay away from YPF. Argentina is just shy of another crisis and possibly another default. And in the end, there’s too much risk in a government-owned company — especially when the government itself is struggling.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.