Hedge funds have adored the FAANGs for so long it’s no wonder that two of them -- Apple Inc. and Facebook Inc. -- are losing their appeal, reports Bloomberg.
Ken Griffin’s Citadel sold 3.4 million shares of Apple, the majority of its stake. And Viking Global Investors, led by Andreas Halvorsen, shed 9.6 million shares of Facebook, or most of its holding. These are just two tidbits from the fire-hose of data hedge fund managers disclosed Monday in 13F filings, due 45 days after the end of each quarter.
The three other FAANGs kept their luster with hedge funds. Melvin Capital took a new stake in Alphabet Inc. of 248,842 shares; Pointstate Capital added to its position in Amazon.com Inc., buying 143,300 shares; and Scopus Asset Management took a new stake in Netflix Inc. of 425,000 shares.
Gaga for BABA
Several large funds built stakes in the American depositary receipts of Alibaba Group Holding Ltd., China’s largest e-commerce company, during the second quarter as the shares were racing to a record high.
David Tepper’s Appaloosa Management bought 3.7 million shares, valued at $520 million as of June 30 -- making it the third-biggest disclosed position in the firm’s stock portfolio. Stanley Druckenmiller’s Duquesne Family Office bought a $100 million stake, while Viking Global purchased a $155 million position.
Alibaba has been buying grocers and investing in physical retail as co-founder Jack Ma has predicted “tremendous challenges” for pure e-commerce players in the future. Alibaba shares have extended their rally since June 30, rising almost 13 percent to hit a high of $158.84 on Aug. 7. The run-up has made Alibaba one of the costliest technology companies.
Other hedge funds including Canyon Capital Advisors and Millennium Management boosted their positions in Altaba Inc., the holding company that controls Yahoo! Inc.’s stake in Alibaba.
Energy companies were among the quarter’s big losers.
Anadarko Petroleum Corp., Marathon Oil Corp., Devon Energy Corp. and Newfield Exploration Co. each lost more than 20 percent of their value in the second quarter as crude slid almost 9 percent. That didn’t appear to deter Point72 Asset Management, which manages the wealth of Steven A. Cohen. The investment firm bought 5.3 million shares in Marathon Oil, 868,481 shares in Anadarko and 553,736 shares in Devon, but sold a small position in Newfield.
Seth Klarman’s $30 billion Baupost Group also added to its energy bets. The hedge fund took a stake worth $67 million in Silver Run Acquisition Corp. II, a company sponsored by Riverstone Holdings that focuses on acquiring businesses in the energy industry. It also increased its holding of Antero Resources Corp. by 6.67 million shares for a stake worth $457.5 million. Jana Partners also added to its energy bets with a new stake in EQT Corp. worth $476.7 million at the end of the quarter. The sometime activist fund has been lobbying the company to scrap a planned takeover of Rice Energy Inc.
Renaissance Technologies looks like a big winner in the highest-profile deal of the quarter. The hedge fund, which held a stake in Whole Foods Market Inc. at the end of the first quarter, increased its position to 2.5 million shares during the period. Good move.
On June 16, Amazon agreed to pay $42 a share in cash for the grocery-chain -- a premium of about 27 percent. Better yet, investor optimism about the transaction turned the target into the best-performing stock in the S&P 500 Index in the second quarter.
Several other hedge funds piled into Whole Foods during the quarter, though it’s unclear whether they did so before or after the deal was announced. Och-Ziff Capital Management Group LLC, Tourbillon Capital Partners and York Capital Management all disclosed new positions.
Blue Apron, Snap
Investors cheering Jana’s position in Blue Apron Holdings Inc. disclosed Monday might want to put their expectations on ice after the rise and fall of Snap Inc.
Jana, the sometimes activist hedge fund led by Barry Rosenstein, on Monday disclosed a 2 percent stake in the newly public meal-kit company, which started trading on June 29. The disclosure pushed up shares of the company 4.7 percent to $5.36 in New York. The jump comes after shares plunged to $5.12 Friday from their $10 debut as the company said it lost customers and warned of trouble ahead in its first earnings report.
Snap provides a look at how the benefits of new hedge fund ownership can be fickle. Shares of the photo app company, which went public in March, surged in its first two days of trading, before dropping 30 percent by mid-May.
Then disclosures filed by big-name hedge funds sent shares jumping more than 8 percent on May 15, the deadline for investment firms to disclose their U.S. stock holdings at the end of the first quarter. Dan Loeb’s Third Point reported a position in Snap worth $50.7 million as of March 31; Discovery Capital Management held a stake worth $62 million and David Tepper’s Appaloosa Management said it had a holding worth $2.3 million.
The enthusiasm for Snap was short-lived. Shares have dropped another 39 percent since then. The three hedge funds’ filings on Monday showed they had sold their stakes in the company at some point during the second quarter.