Third Point takes 1.6
million share stake in BlackRock, 4.5 million in Alibaba
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[August 12, 2017]
By Jennifer Ablan
NEW YORK (Reuters) - Dan Loeb's Third Point
took a 1.6 million-share stake in BlackRock Inc <BLK.N> and reinitiated
a stake in Alibaba Group Holding <BABA.N> of 4.5 million shares during
the second quarter ended June 30, according to regulatory filings late
In its letter last month to investors, Third Point called BlackRock an
"asset-gathering machine," with organic net inflows of over 70 percent
"Yet we see BlackRock as far more than an asset manager dependent on
market movements. It is increasingly becoming a network or index-like
business, with earnings power driven by ETFs (via iShares) and data &
analytic services (via Aladdin)," Third Point said.
"These are oligopoly businesses with faster growth and much higher
incremental margins than traditional asset management - and thus deserve
much higher P/E multiples over time."
Third Point, which earned 4.6 percent in its Offshore Fund during the
second quarter, bringing total returns for the year to 10.7 percent,
also reinitiated an investment in Alibaba. The firm has owned Alibaba
shares directly and via its positions in Yahoo and Softbank over the
past six years.
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A man walks next to a BlackRock sign pictured in the Manhattan
borough of New York, October 11, 2015. REUTERS/Eduardo Munoz
In its second quarter letter, Third Point said Alibaba has consistently
surpassed its growth estimates for gross merchandise value, revenue, and
earnings and currently, the company has achieved scale.
"Alibaba is currently at a positive inflection point after rolling out
significant changes over the past year to its advertising platform, which
currently generates the majority of the company’s revenue," Third Point said.
"We view these changes as an important catalyst for meaningful revenue
acceleration over the next few years. Combined with an attractive multiple, we
believe now is the time to own Alibaba again."
During the second quarter, Third Point also dissolved its share stake in Snap
Inc <SNAP.N>, Salesforce.com Inc <CRM.N> and Qualcomm Inc <QCOM.O>.
The quarterly disclosures of asset manager stock holdings, in what are known as
13F filings with the U.S. Securities and Exchange Commission, offer clues on
what big investors are selling and buying, but give no indication of their
(Reporting by Jennifer Ablan; Editing by Tom Brown)
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