Daniel Loeb’s Third Point has dissolved its stakes in three tech companies following the decline in technology stocks.
A filing with the Securities and Exchange Commission (SEC) reveals that Third Point dissolved its stakes in Microsoft, Netflix, and Alibaba on December 31. As of the third quarter of 2018, Third Point held 4.1 million Microsoft shares, 1.25 million shares of Netflix, and 4.05 million Alibaba shares.
However, in November of 2018, the manager of the hedge fund, Daniel Loeb said that he is concerned about market conditions. In a letter addressed to investors, Loeb said that he had cut down his company’s positions in technology stocks. Third Point revealed in a November filing that it had trimmed its position in Netflix by more than 33 percent but had raised its stake in Microsoft.
According to figures obtained by Leslie Picker, the hedge fund’s decision to dissolve stakes at the three tech firms comes after a difficult year for Third Point. The company recorded a yearly loss of about 11 percent. The dwindling economic conditions, as well as the current trade tensions between the US and major foreign traders, have rattled the stock markets, causing a significant decline in the S&P 500. Statistics show that the S&P 500 ended 2018 with a decline of about 6 percent.
Last year when Third Point dissolved its stake in Facebook, Loeb said that the direction, in 2019, will be based on the interplay of slowing U.S. growth and the level to which Chinese stimulus can boost non‐US growth.
Third Point is a New York hedge fund that was established in 1995 by Daniel Loeb and it boasts of about $18 billion in assets.
For more than twenty years, its founder has successfully delivered returns that exceeds that of the S&P 500’s. In 2017, Loeb’s made returns of 18.1 percent even when many of his rivals underperformed.