Hedge Funds Bought Netflix, Facebook in Rough Third Quarter

(Bloomberg) -- U.S. hedge funds bought shares of Facebook Inc. and Netflix Inc. despite steep declines in the technology darlings during a volatile third quarter.

Chase Coleman and David Tepper were among the money managers who increased their Facebook holdings during the three-month stretch that saw the social-media giant fall nearly 8%. Netflix was favored by firms including Lee Ainslie’s Maverick Capital Ltd. and Dan Sundheim’s D1 Capital Partners despite a 27% drop in the three months ending Sept. 30.

Hedge fund managers, who have long adored FAANG stocks, had to navigate a tumultuous period. While Amazon.com Inc. also fell, down 8%, Google parent Alphabet Inc. and Apple Inc. both rose more than 13%. At the same time, the S&P 500 index gained 1.2% amid an escalation in the U.S.-China trade war and dovish moves by central bankers.

Here are some other notable moves:

• Harvard University’s endowment added 2 million Facebook shares, bringing the value of its position to roughly $400 million on Sept. 30, and making the company its biggest single U.S. equity holding.
• Stan Druckenmiller offloaded almost his entire stake in Uber Technologies Inc., selling 2.5 million shares. His Duquesne Family Office took a stake in Shopify Inc.
• Warren Buffett’s Berkshire Hathaway Inc. announced new common-equity stakes in Occidental Petroleum Corp., which is on top of a preferred stake that was previously disclosed. It also purchased shares of home furnishings company RH, which sent the stock surging the day after the filing. RH rose as much as 8.7%. the most since June, in early trading on Friday. Berkshire trimmed some of its largest stock bets, including Apple, Wells Fargo & Co. and Phillips 66.
• Viking Global Investors ditched its $1.2 billion stake in UnitedHealth Group Inc. as health-care stocks were hit by politics both in Washington and on the campaign trial.
• Maverick sold 690,000 shares of managed-care company Humana Inc., which had been the fund’s top U.S. equity position in the second quarter. (It now sits at No. 9).
• Microsoft Corp. was one of the less popular stocks for the second quarter in a row. Tiger cubs Viking, Coatue Management and Maverick all decreased their holdings in the tech giant as did Duquesne. But the software giant was up more than 3% during that period and has been a top performer this year -- shares have gained almost 46%.

--With assistance from Katherine Chiglinsky, Emma Vickers, Vincent Bielski, Scott Deveau and Michael McDonald.

To contact the reporters on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net;Hema Parmar in New York at hparmar6@bloomberg.net;Melissa Karsh in New York at mkarsh@bloomberg.net

To contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, Alan Mirabella

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