Wall Street Breakfast: Whale Watch

Aug. 16, 2022 8:51 AM ETNDX, QQQ, SPY, BRK.A, BRK.B, ATVI, VZ, TSLA, MGM, SLDP, CRM, BABA, NFLX, PINS, TWTR, RIVN, AMZN, VRM, CVNA, BLCO, DIS, WE, PBR, SNOW, SPLK, TME, SONY, BP, TRQ, RIO, META, LMT, NU, MEGL, CCL28 Comments
Wall Street Breakfast profile picture
Wall Street Breakfast
5.77M Followers

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Stitcher and Spotify.

Whale watch

Growth stocks were among the favorites for hedge fund whales in the second quarter. Monday was the deadline for hedge funds with more than $100M in assets under management, as well as other institutional investors and endowments, to report certain stock holdings through 13F filings. The 13F season gives investors a glimpse into where the big players are betting, albeit with dated information.

A number of hedge funds and money managers looked to pick up beaten-down growth stocks, such as tech, in Q2. From April to June, the Nasdaq 100 (NDX) (QQQ) fell more than 22%, while the S&P 500 (SP500) (SPY) was down about 16.5%.

Who's buying what?: Among the big-name disclosures, Warren Buffett's Berkshire-Hathaway (BRK.A) (BRK.B) boosted its stake in Activision (ATVI) to ~68.4M shares from 64.3M. It also exited its stake in Verizon (VZ).

Soros Fund Management made a new investment in Tesla (TSLA) (~29.9K shares) and disposed of its stakes in MGM Resorts (MGM) and Solid Power (SLDP).

David Tepper's Appaloosa took new positions in Salesforce (CRM), buying 200K shares, Alibaba (BABA), acquiring 100K shares, and Netflix (NFLX), with 50K shares, during Q2.

In addition, Elliott Investment Management started a stake in Pinterest (PINS) and shed Twitter (TWTR), Ray Dalio's Bridgewater started positions in Rivian (RIVN) and Amazon (AMZN), the Gates Foundation turned to autos with Vroom (VRM) and Carvana (CVNA), and Carl Icahn eyed Bausch + Lomb (BLCO).

Dan Loeb takes aim at Disney: It wouldn't be 13F season without some hedge fund saber rattling. Dan Loeb's Third Point Capital revealed a new stake of 1M shares in Disney (DIS) in its filing, but added in a letter directly to the company that in recent weeks it had “repurchased a significant stake.”

Third Point lobbied for a refresh of the Disney board, made its case for an ESPN spinoff and also asked the FTC for permission to engage directly with the company.

Disney defended the composition of its board and noted that members have an average tenure of just four years. (5 comments)

WeWork founder backing

Andreessen Horowitz, the prominent Silicon Valley venture capital firm, is investing ~$350M in Flow, a new business being started by WeWork's (WE) founder Adam Neumann.

This time Neumann's venture is focusing on residential rentals, a shift from the flexible office space model he pioneered. The amount that Andreessen Horowitz is investing is the largest it has ever made in a round of funding a company and values the firm that hasn't yet even started operations at more than $1B.

In a post on AH's website, Marc Andreessen explained why the firm is putting its money into the venture. "We think it is natural that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes. Residential real estate - the world’s largest asset class - is ready for exactly this change," Andreessen said. (4 comments)

Gas prices

Petrobras (PBR) said it would cut refinery gate gasoline prices by 4.9% starting Tuesday, the company's third price reduction in less than a month following a drop in international benchmark prices. The company said it would cut prices to an average of 3.53 reais/liter (~$0.69) from 3.71 reais/liter, dropping them to the lowest level since mid-March.

The cut followed benchmark prices lower and was "in line with Petrobras' pricing policy," the company said, after also receiving frequent criticism from Brazil President Jair Bolsonaro, who trails in opinion polls ahead of the October election. (1 comments)

Software sales slowdown?

While the lion's share of the season's tech earnings results has already come in, the infrastructure software sector remains in line for a slate of reports that may show a slowdown in growth that could drag on for several months. That's the view from analysts at Morgan Stanley, who on Monday lowered their revenue outlooks on a handful of software companies such as Snowflake (SNOW) and Splunk (SPLK).

Analysts led by Sanjit Singh said that factors such as longer sales cycles for companies that sell to large enterprises, slower usage trends that charge customers based on their product usage and growing weakness in Europe have conspired to result in a more cautious view of the infrastructure software sector. (1 comments)

Tencent boosts payers

Tencent Music Entertainment (TME) reported second-quarter earnings where it saw some broad user declines but boosted subscription revenues alongside an increase in paying users. Revenues fell by 13.8% to 6.91B yuan (about $1.03B), a decline that was better than expected, and the figure was up 3.9% from the prior quarter.

Revenue from music subscriptions, though, jumped nearly 18% to 2.11B yuan (about $315M). In total user metrics, mobile monthly active users in online music fell by 4.8% to 593M, and mobile MAU for social entertainment slid by 20.6%, to 166M - a decline the company attributed to lower marketing spending. While paying users for social entertainment also fell 28.2% to 7.9M, paying users for online music jumped nearly 25%, to 82.7M (which the company credited to expanded sales channels and paying user loyalty, along with moderated promotions). (0 comments)

Today's Market

In Asia, Japan -0.01%. Hong Kong -1.05%. China +0.05%. India +0.46%.
In Europe, at midday, London +0.51%. Paris +0.24%. Frankfurt +0.52%.
Futures at 6:30, Dow -0.07%. S&P -0.18%. Nasdaq -0.21%. Crude -0.51% to $88.95. Gold -0.42% to $1790.35. Bitcoin +0.30% to $24,112.1.
Ten-year Treasury Yield +1 bps to 2.80%

Today's Economic Calendar

8:30 Housing Starts and Permits
9:15 Industrial Production

Companies reporting earnings today »

What else is happening...

Bullet Train (SONY),' 'Maverick' lead slowest box office in six months.

BP (BP) looking to dispose of its Mexican oil assets.

Turquoise Hill (TRQ) rejects Rio Tinto's (RIO) bid to take control of huge Mongolia mine.

FTC's move to block Meta's (META) Within purchase gets December court date.

Elon Musk tells China his views on the future of technology and society.

Lockheed (LMT) F-35 jets return to flight for Air Force after two-week grounding.

Nu (NU) stock climbs after Q2 revenue beat on customer, portfolio growth.

Hong Kong's Magic Empire (MEGL) stock rallies 77% after plunging 93% last week.

HSBC sees more than 35% downside ahead for Carnival Corp. (CCL) stock.

This article was written by

Wall Street Breakfast profile picture
5.77M Followers
Wall Street Breakfast, Seeking Alpha's flagship daily business news summary, is a one-page summary that gives you a rapid overview of the day's key financial news. It's designed for easy readability on the site or by email (including on mobile devices), and is published before 7:00 AM ET every market day. Wall Street Breakfast readership of over 1.6 million includes many from the investment-banking and fund-management industries. Sign up here to receive the Wall Street Breakfast in your inbox every business day: http://seekingalpha.com/account/email_preferences

Recommended For You

Comments (28)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.