Hedge fund DE Shaw laid off 150 employees a couple of weeks ago, and the reason is being traced back to a town the company tried to create in New Mexico. Trying to add to the map of a state, it seems, doesn’t pay.
DE Shaw and real estate developer SunCal Cos carved out 55,000 acres (twice the size of Boston, according to Business Insider) and sought to turn it into a new town. The financial crisis pretty much put a stop to the $250 million endeavor, but when the music stopped, the payments didn’t. Now it looks like DE Shaw has a $150 million tab.
The question that remains, according to Business Insider’s Courtney Comstock, is pretty simple:
DE Shaw is a quant fund that trades – we thought – exclusively computer-driven strategies. So what the heck were they doing trying to create a residential, industrial, and commercial community out in New Mexico?
Hopefully, nobody printed updated maps!
[photo by leiris202 via Flickr]