China Stock, Apple Dropped By Big Hedge Funds

China Stock, Apple Dropped By Big Hedge Funds

Many hedge fund managers dumped Chinese technology stocks and Silicon Valley majors like Facebook Inc and Apple Inc as global stock markets dipped in the fourth quarter, as per the securities filings that were released on Thursday.  Jana Partners, activist hedge fund sold out of its positions in Alibaba Group Holdings Ltd, a major Chinese e-commerce company. It also reduced its stake in Apple Inc around 175,000 shares, thereby reducing its positions in the company by 63 percent.

Warren Buffett’s Berkshire Hathaway Inc also reduced its Apple stake from 252.5 million shares to 249.6 million shares during the fourth quarter. Debbie Bosanek, Buffett’s assistant, said to Reuters in an email that one of the managers who had a position in Apple sold part of it to make an unrelated purchase. She said that none of the other shares had been sold.

David Tepper’s Appaloosa Management and Soros Fund Management also sold out of their stakes in Apple.  Third Point LLC sold its stake in the streaming company Netflix Inc and Alibaba and also reduced its stake in Visa Inc, a payments company by around 200,000 shares, which comes to 11 percent of its earlier position.  Omega Advisors also sold all of its 88,000 Facebook shares and reduced its stake in Alphabet Inc, Google parent company by selling around 47,600 shares.

These moves came about during the volatile fourth quarter during which the fears of dropping economic growth also pushed the U.S. benchmark S&P 500 index to the edge of a bear market. The stock indexes in Germany and China also saw the year-end by going down 20 percent or more.  Since then, the market has rebounded on the hopes of a new U.S. – China trade deal.

Alibaba shares have gone up by 23 percent since the beginning of 2019, while Netflix has also increased by 34 percent at the same time. These gains helped the average hedge fund to report the largest monthly gain in January since September 2010, according to experts at Hedge Fund Research.

According to Kenneth J. Heinz, president of HR, investor optimism was high in January. Macroeconomic uncertainty still exists, and this increases the likelihood that recent trends will continue to steer industry performance.  Along with selling off many technology stocks, hedge fund managers added new potions in companies like Salesforce.Com Inc, MasterCard Inc and so on. Jana Partners purchased over 115,000 shares of Salesforce.com, while Third Point purchased around 675,000 shares.

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