Soros Fund (George Soros) disclosed updated portfolio positions in 13F filing: New GCP BHVN ACI positions, Exited MGM SLDP
Highlights from 2022 Q2 filing as compared to Q1 2022:
- New positions in: GCP (~2.11 mln shares), BHVN (~1.26 mln), ACI (~0.5 mln), KMI (~0.5 mln), CWH (~0.33 mln), UBER (~0.3 mln), DRE (~0.26 mln), WMB (~0.23 mln), LVS (~0.22 mln)
- Increased positions in: INDI (to ~9.12 mln shares from ~4.36 mln shares), AMZN (to ~2 mln from ~1.41 mln), FIGS (to ~3.49 mln from ~2.9 mln), CRM (to ~0.63 mln from ~0.26 mln), BOWL (to ~9.67 mln from ~9.4 mln) FRSH (to ~2.04 mln from ~1.95 mln), QCOM (to ~0.23 mln from ~0.15 mln) NKE (to ~0.35 mln from ~0.3 mln),
- Maintained positions in: ARMK (~3.62 mln shares), LPLA (~0.19 mln)
- Closed positions in: MGM (from ~0.35 mln shares), SLDP (from ~0.35 mln), STEM (from ~0.3 mln), TJX (from ~0.25 mln), COLB (from ~0.24 mln), CZR (from ~0.16 mln), TOST (from ~0.15 mln), SHEL (from ~0.1 mln), EXP (from ~0.09 mln)
- Decreased positions in: RIVN (to ~17.84 mln shares from ~19.84 mln shares), OPEN (to ~1.65 mln from ~1.86 mln), JPM (to ~0.01 mln from ~0.19 mln), FLNC (to ~0.15 mln from ~0.26 mln), PTRA (to ~2.82 mln from ~2.92 mln), TTE (to ~0.05 mln from ~0.13 mln), ABNB (to ~0.05 mln from ~0.08 mln), TSM (to ~0.06 mln from ~0.09 mln), ADI (to ~0.12 mln from ~0.15 mln), DHI (to ~2.98 mln from ~3.01 mln)
Starboard Value (Jeffrey Smith) disclosed updated portfolio positions in 13F filing: Increased NLOK LPSN holdings
Highlights from 2022 Q2 filing as compared to Q1 2022:
- Increased positions in: NLOK (to ~19.2 mln shares from ~16.7 mln shares), LPSN (to ~7.01 mln from ~6.41 mln), MRCY (to ~3.94 mln from ~3.58 mln), WTW (to ~2.25 mln from ~2.14 mln), GDDY (to ~8.38 mln from ~8.25 mln)
- Mostly maintained positions in: CYXT (~20.77 mln shares, ACM (~7.02 mln shares, slightly lower than prior 7.09 mln shares), GCP (~6.54 mln shares), MD (~5.92 mln shares), GDOT (~5.29 mln shares), CVLT (~3.80 mln shares, slightly lower than prior 3.836 mln), PZZA (~2.76 mln shares), HUM (960K shares, slightly lower than prior 968.2K shares)
- Decreased positions in: HUN (to ~8.31 mln shares from ~16.52 mln shares), CTVA (to ~1.02 mln from ~6 mln), KSS (to ~0.54 mln from ~3.33 mln), ELAN (to ~5.73 mln from ~6.9 mln), ACIW (to ~5.2 mln from ~6.24 mln), IWM (to ~0.31 mln from ~1.31 mln), ON (to ~5.62 mln from ~6.62 mln)
Baupost Group (Seth Klarman) discloses updated portfolio positions in 13F filing: New EDU AMZN positions, Exited POST
Highlights from 2022 Q2 filing as compared to Q1 2022:
- New positions in: EDU (~8 mln shares), AMZN (~0.6 mln)
- Increased positions in: LSXMK (to ~13.25 mln shares from ~11.16 mln shares), LSXMA (to ~7.32 mln from ~5.62 mln), GTN (to ~2.26 mln from ~1.29 mln), QRVO (to ~6.97 mln from ~6.65 mln)
- Maintained positions in: VSAT (~16.29 mln shares), TBPH (~13.42 mln shares), VRTV (~3.56 mln shares), EHC (~2.95 mln shares)
- Closed positions in: POST (from ~0.38 mln shares)
- Decreased positions in: INTC (to ~8.72 mln shares from ~16.59 mln shares), DBRG (to ~13.16 mln from ~18.37 mln), DBX (to ~7.82 mln from ~10.57 mln), IS (to ~5.85 mln from ~7.94 mln), VRNT (to ~0.2 mln from ~2.21 mln), NXST (to ~0.28 mln from ~1.15 mln), SSNC (to ~2.96 mln from ~3.77 mln), TUMQ (to ~10.51 mln from ~11.13 mln), META (to ~0.69 mln from ~0.97 mln), GOOG (to ~0.17 mln from ~0.24 mln), FISV (to ~3.53 mln from ~3.99 mln)
Jana Partners (Barry Rosenstein) discloses updated portfolio positions in 13F filing: Affirms new NEWR position, lowered CAG holding
Highlights from 2022 Q2 filing as compared to Q1 2022:
- New positions in: NEWR (~3.53 mln shares)
- Increased positions in: LH (to ~0.85 mln shares from ~0.45 mln shares), SPY (to ~0.42 mln from ~0.31 mln)
- Maintained positions in: THS (~5.13 mln shares), MRCY (~3.24 mln shares), EHC (~2.85 mln shares)
- Closed positions in: ZEN (from ~3.1 mln shares)
- Decreased positions in: CAG (to ~1 mln shares from ~8.05 mln shares)
Trian Fund (Nelson Peltz) discloses updated portfolio positions in 13F filing: Increased IVZ FERG holdings
Highlights from 2022 Q2 filing as compared to Q1 2022:
- Increased positions in: IVZ (to ~55.76 mln shares from ~54.03 mln shares), FERG (to ~12.83 mln from ~11.4 mln)
- Maintained positions in: JHG (~31.87 mln shares), WEN (~25.33 mln shares), GE (~4.03 mln shares)
- Decreased positions in: SYY (to ~8.79 mln shares from ~11.5 mln shares), MDLZ (to ~0.02 mln from ~0.45 mln)
After Hours Summary: Lots of 13F filings; FN +11.5%, GSM +8.9%, TME +2.8% higher on earnings; ZIP -4.7% lower on earnings, lots of smaller names reportingAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: DNA +22%, BLND +17.4%, FN +11.5%, GSM +8.9%, TME +2.8%, GLBE +1.1%, TDUP +0.3%
Companies trading higher in after hours in reaction to news: GRTS +5.7% (publishes Interim Results from Gritstone bio's Phase 1/2 Study of GRANITE), ALLY +4.3% (Berkshire Hathaway discloses increased position), VRDN +3.4% (commences stock offering), UPLD +2.9% (CEO discloses purchase of 20K shares), WETG +2.5% (COO resigns), VTYX +2.2% (announces topline Phase 1 data for VTX958), VMEO +2.2% (reports July metrics), EA +1.8% (authorizes new $2.6 bln share repurchase program), NRDY +1.4% (acquires Codeverse to add coding classes to its library of academic programs, also reports earnings), PARA +1.1% (WMT to offer Paramount+ streaming subscription at no cost; also Berkshire Hathaway discloses increased position), CE +1% (Berkshire Hathaway discloses increased position), CR +0.9% (announces sale of subsidiary holding all asbestos liabilities, related insurance assets, and $550 mln of cash), RKLB +0.8% (upcoming 30th Electron launch will deliver its 150th payload), STOR +0.8% (Berkshire Hathaway discloses decreased position), ECL +0.8% (10% owner Casacde Investment discloses purchase of $31.8 mln in shares), STNG +0.8% (STNG repurchased $50 mln of shares from NETI, a related party), MCK +0.7% (Berkshire Hathaway discloses increased position), NETI +0.7% (STNG repurchased $50 mln of shares from NETI, a related party), WMT +0.6% (WMT to offer Paramount+ streaming subscription at no cost), FULC +0.1% (commences stock offering), PAYC +0.1% (increases share repurchase authorization to $1.1 bln), ATVI +0.1% (Berkshire Hathaway discloses increased position)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ALBO -15.8%, SMFR -13.8%, SLGC -11.9%, COMP -10.3%, FLNC -5.4%, ZIP -4.7%, NVTS -2.6% (also acquires GeneSiC Semiconductor), SHLS -1.4%
Companies trading lower in after hours in reaction to news: TELA -7.1% (commences stock offering), USB -7% (Berkshire Hathaway discloses decreased position), NOVA -6.8% (to offer $425 mln of convertible senior notes), TRIN -6.6% (commences stock offering), INBX -3% (European Commission grants orphan medicinal product designation to INBRX-109), MKL -0.9% (Berkshire Hathaway discloses increased position), OXY -0.4% (Berkshire Hathaway discloses increased position), AAPL -0.1% (Berkshire Hathaway discloses increased position), CVX -0.1% (Berkshire Hathaway discloses increased position)
Activist investor Third Point urges sweeping changes at Disney
Shares rise as Daniel Loeb takes ‘significant’ new stake in entertainment group
Activist investor Dan Loeb is agitating for sweeping changes at Disney, including a shake-up of its board, a spin-off of the sports television network ESPN and aggressive cost-cutting after rebuilding a stake in the entertainment and media group.
The head of the Third Point hedge fund also recommended that the company take full control of the streaming service Hulu by buying a minority stake from rival Comcast. Shares of Disney rose 2.8 per cent to $125 on Monday.
Disney’s “costs are among the highest in the industry”, Loeb wrote in a letter to Bob Chapek, the company’s chief executive, adding that “a strong case can be made that the ESPN business should be spun off to shareholders” to reduce Disney’s debt. ESPN broadcasts live sports in the US including games of the National Football League, National Basketball Association and Major League Baseball.
Disney has invested heavily to build out its video streaming service, Disney Plus, and is expected to spend roughly $30bn on content this year. Last week Chapek said Disney remained on track to reach its goal of achieving profitability at Disney Plus by 2024 as the company reported quarterly net profit of $1.4bn.
Loeb said he did not mean to single out individuals to be removed from Disney’s 11-member board, but he did say that Third Point has identified candidates who “would make essential contributions” to the company. “We believe there are gaps in talent and experience as a group that must be addressed,” the letter said.
Disney said it welcomes “the views of all our investors” but pushed back against Loeb’s criticism of the board.
“Our independent and experienced board has significant expertise in branded, consumer-facing and technology businesses as well as talent-driven enterprises,” the company said. “The board has also benefited from continuous refreshment with an average tenure of four years.”
Third Point previously took a position in Disney in the second quarter of 2020, not long after Disney Plus was launched as a rival to Netflix, and then sold it off as the stock rose. Shares in Disney increased 70 per cent from May 2020 until August 2021, when Third Point first disclosed the previous position.
Disney’s stock has declined 21 per cent so far this year, though it rose by 30 per cent over the past month before Loeb disclosed his new stake on Monday.
The move by the billionaire hedge fund manager appeared to be friendly, as he praised the company’s shift to streaming and its recent third-quarter results, which topped Wall Street estimates.
“Disney’s complex transformation is succeeding and our confidence in Disney’s current trajectory is such that we have, in recent weeks, repurchased a significant stake in the company,” he wrote.
Some Wall Street analysts have been clamouring for some of the changes Loeb is recommending, including a potential ESPN spin-off and an early resolution of the Hulu ownership structure.
Disney owns 67 per cent of Hulu. Loeb urged the company to buy Comcast’s 33 per cent stake in the streaming services before 2024, when a contract enables Comcast to force Disney to buy it. Analysts estimate Disney may have to pay $15bn-$20bn for the stake.
Despite his tone with Disney, Loeb is best known for being an aggressive investor who uses tough tactics including harshly worded public attacks against management teams to achieve his demands.
Third Point’s main fund has taken a hit in the first part of the year as it underperformed several rivals. In the first three months of 2022, Loeb sold off chunks of big stakes in tech companies including Microsoft, Dell and fintech group Intuit.
Andreessen Horowitz backs WeWork co-founder’s property venture
Silicon Valley firm invests $350mn with billionaire ‘visionary leader’ Adam Neumann
Adam Neumann has attracted his biggest external investment since January 2019, when Masayoshi Son’s SoftBank put a $47bn valuation on WeWork, the office space company he co-founded that is now valued at $4bn.
Andreessen Horowitz, the Silicon Valley venture capital firm, said on Monday that it had backed Flow, the residential real estate company Neumann has been building since a failed attempt to take WeWork public prompted him to resign as chief executive.
One person familiar with the matter said that Andreessen Horowitz had invested $350mn at a roughly $1bn valuation. In May, it had invested an undisclosed sum in Flowcarbon, another Neumann-backed company that is trying to make carbon credit markets more transparent using blockchain technology.
In a blog post, co-founder Marc Andreessen heaped praise on Neumann as “a visionary leader who revolutionised the second-largest asset class in the world — commercial real estate” and stood to shake up residential property, the only larger asset class.
“Only one person has fundamentally redesigned the office experience and led a paradigm-changing global company in the process: Adam Neumann,” he said.
In a nod to past controversies, Andreessen added: “We love seeing repeat-founders build on past successes by growing from lessons learned. For Adam, the successes and lessons are plenty.”
Neumann, who left WeWork a billionaire, has disclosed few details of Flow’s plans: its website only features the words “live life in flow” and “coming 2023”. A spokesman for Neumann declined to comment.
But in an interview with the Financial Times in March he said he was tapping into housing supply and affordability crises that were forcing more young Americans to rent rather than buy.
He saw “tremendous opportunity” to provide a greater sense of community in multifamily accommodation, he said at the time, and was targeting cities such as Austin, Miami and Nashville, which combine growing populations of young people with job growth, cultural attractions and good weather.
Andreessen, an early backer of Facebook and Airbnb, gave few details on how Flow would work, but said that it would involve “rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders”.
After leaving WeWork, Neumann began buying hundreds of millions of dollars’ worth of affordable rental apartments.
“We started by buying this real estate, but then I started walking the buildings, just feeling, and it felt like there’s so much more that could be done to make these tenants’ lives better,” he told the FT in March.
Neumann had ventured into residential property with the launch of WeLive, but managed to open only two of its communal apartment buildings before leaving WeWork.
Last October his family office led a $42mn fundraising for Alfred, which offers tenants services ranging from collecting their dry cleaning to booking communal yoga sessions.
Marcela Sapone, Alfred’s chief executive, said however that Flow would not be using her “resident experience” company’s product. “This is the Alfred model, but he’ll be focusing on his buildings,” she said. “His belief is this is going to be good for both of us.”
Andreessen attracted widespread attention early in the coronavirus pandemic with a rallying cry to Silicon Valley to put more of its money into creating physical assets.
His essay attacked a “smug complacency” that he said had led to under-investment in manufacturing and construction of all kinds, leading among other things to “crazily skyrocketing housing prices in places like San Francisco, making it nearly impossible for regular people to move in and take the jobs of the future.”
However, earlier this year Andreessen and his wife, philanthropist Laura Arrillaga Andreessen, attacked a proposal to change zoning rules in Atherton, California, the wealthy Silicon Valley town where they live, to allow the construction of multifamily homes, according to The Atlantic. The zoning proposal was dropped in July.
Thoma Bravo considers taking Darktrace private
UK-based cyber security tech company advised by Mike Lynch attracts bid from US private equity group
Thoma Bravo, a US-based technology private equity group, is considering a bid to privatise Darktrace, a cyber security technology company advised by former Autonomy head Mike Lynch.
Thoma Bravo has begun discussions on a cash takeover offer for Darktrace, the UK-based company said in a regulatory disclosure. It has a market capitalisation of £2.67bn.
The private equity group will have until September 12 to either make a formal offer or abandon the takeover effort. Darktrace is being advised by investment banks Jefferies and Lazard, the company said. Darktrace shares rose 17 per cent in Monday afternoon trading in New York.
The share price of Darktrace, which provides AI-based cyber security that it says can protect against serious threats such as ransomware and cloud attacks, rose by more than 40 per cent after Russia invaded Ukraine and fears of global cyberwarfare proliferated.
Darktrace has ties with Mike Lynch, the British software entrepreneur who has been charged with 14 counts of conspiracy and fraud linked to the $11.6bn sale of his former company, Autonomy, to Hewlett-Packard in 2011.
In January, the UK home secretary Priti Patel approved the extradition of Lynch to the US after months of legal wrangling that ended with the High Court in London rejecting an attempt by his lawyers to win more time to consider the order.
Lynch, who has strongly denied any wrongdoing over the Autonomy deal, helped to create Darktrace in 2013. Filings show that Invoke, which has funded several UK tech start-ups since it was founded in 2012, then financed Darktrace’s first two years of operations. Lynch stepped down as a director of Darktrace in 2018, but continued to serve on the company’s advisory council until 2021. In the year ending June 2020, Darktrace paid Invoke more than $3mn, on top of $2mn paid in the two previous years.
The cyber security company floated on the London Stock Exchange in April last year. In the following six months its share price nearly tripled, from 333p at IPO to 945p in October.
The stock plummeted, however, after a sell note by the corporate broker Peel Hunt claimed that the company was only worth half its value. The note added that the broker believed a gulf lay between its marketing and what it could offer.
Darktrace entered the FTSE 100 index in October but returned to the FTSE 250 two months later.
Thoma Bravo, with $114bn in assets, is one of the world’s most active investors in cyber security companies, with a specialised set of dealmakers targeting the sector.
Cybersecurity deals have been a bright spot in an otherwise challenged dealmaking environment for technology companies. Lenders to such deals remain willing to finance privatisations of cyber security companies because of their perceived resilience to broader economic issues, sources have told the Financial Times.
Last year, Thoma Bravo took the email security company Proofpoint private for $12.3bn, in one of the year’s largest technology takeovers. It has remained an active buyer this year, even though the broader technology has sold off sharply. Earlier this year, it agreed to privatise SailPoint Technologies for $6.9bn and Ping Identity for $2.8bn.
Private equity buyers such as Thoma Bravo and its competitor Vista Equity have also begun targeting UK-based technology companies, which trade at lower multiples than their US counterparts.
Thoma Bravo’s recent takeovers in the US come at multiples of more than 10 times trailing 12-month sales, while Darktrace currently trades below such valuation multiples.
Last year, Vista bid on Blue Prism, a robotics automation software company, before dropping out of the takeover effort. Blue Prism was acquired by US-based software group SS&C Technologies for £1.25bn, or around seven times its 2021 turnover.
Digital advertising: Apple takes bigger bite of new business
The tech group hopes to make its services activities equal contributors to company profits alongside hardware sales
Search for ‘Instagram’ on the Apple App Store and the first result might not be Instagram’s app. Apple’s growing digital advertising business has turned the App Store into prime real estate for ads. Like Google and Amazon, top search results tend to be paid for.
Apple’s advertising ambitions coincide with the company’s simultaneous crackdown on third parties who track users to show them personalised adverts. That move has cost companies like Meta billions of dollars in lost advertising revenue.
The contrast is awkward. But across the tech sector, many companies are attempting to add digital ads to their revenue stream. Ride hailing companies Uber and Lyft now sell ads. Netflix is adding a subscription tier with adverts to its streaming service. So is Disney+.
While it has yet to break out numbers, Apple claims that its advertising business is hitting new records in quarterly earnings. Amazon’s successful introduction of advertising suggests there is enough business to go around. But the winners will be only companies able to collect large amounts of data that can be used to match adverts to audience. In the second quarter, Amazon’s advertising sales rose 18 per cent on the previous year. That is a far quicker pace of growth than advertising-led companies such as Twitter, Meta, Snap and Pinterest — all of which rely on third-party data.
Apple has 860mn people paying for its services and close to 2bn devices in use. That means it has a lot of data to employ. For now, advertising is limited to the App Store, news and stocks apps and during baseball games streamed via Apple TV. But it would make sense for adverts to one day appear in other services, such as payments. The caveat is that this would not damage the user experience — UX in tech terms.
Apple’s decision to position itself as a privacy-centric advertising platform helps in this regard. Internet users are increasingly unhappy at having their movements tracked online and sold to shadowy buyers.
Apple hopes to make its services activities equal contributors to company profits alongside hardware sales. These businesses are heavily reliant on fees charged to app creators, something regulators criticise. Replacing some of those fees with another source of high margin revenue should be a priority. Advertising fits the bill.