Hedge Funds Coatue, D1 Added Pandemic Stocks Before Delta Spread
(Bloomberg) -- Hedge funds loaded up on companies that would benefit from a resurgent Covid-19 pandemic even before the delta variant began to rapidly spread throughout the U.S.
Chase Coleman’s Tiger Global Management and Philippe Laffont’s Coatue Management both increased their stakes in food delivery service DoorDash Inc. in the second quarter. Coatue also added to its bet on vaccine maker Moderna Inc., while Stephen Mandel’s Lone Pine Capital took a new stake in the biotech company worth more than $900 million.
The purchases are an about-face from the first quarter, when many hedge funds cut positions in companies like Peloton Interactive Inc. and Zoom Video Communications Inc. as vaccinations began to ramp up in the U.S. That, in turn, fueled wagers on companies that had been hardest-hit by travel restrictions and remote work.
Tiger and Coatue also increased their stakes in Zoom in the three months through June, according to their 13F filings. The two funds, along with D1 Capital Partners, were among those that added to positions in Peloton, while Viking Global Investors made a new bet on the exercise equipment company.
The Covid-19 delta variant emerged on the world’s radar in May, with India recording more than 16 million cases and some 200,000 deaths in two months. By July 4, the highly infectious strain had become dominant in the U.S.
In the six weeks since then, the U.S. has seen a 10-fold increase in daily cases and a tripling of new deaths, the vast majority of which are among unvaccinated Americans. The number of people dying with Covid-19 in U.S. hospitals is now hitting previous highs in some hot-spot states with low-to-average vaccination rates.
Hedge funds Coatue, Viking and Gabe Plotkin’s Melvin Capital Management added new positions in Beijing-based JD.com Inc. in the quarter -- an unfortunate move as shares of the giant online vendor have slid 16% since June 30.
Chinese shares have tumbled since June as Beijing banned for-profit tutoring companies and ordered more than two dozen tech firms to carry out internal inspections and address issues such as data security.
Other findings from the second-quarter 13F filings include:
- Michael Burry, of “The Big Short” fame, owned puts on Cathie Wood’s ARK Innovation ETF.
- George Soros’s investment firm, which snapped up shares sold off in massive blocks during the collapse of Bill Hwang’s Archegos Capital Management, exited the positions.
- Seth Klarman’s long-standing investment in Rupert Murdoch’s media empire finally came to an end during the second quarter. Baupost Group, the hedge fund manager founded by Klarman, sold its entire Fox Corp. stake, including 7.6 million Class A shares and 5.7 million Class B shares with a combined market value of $446 million at the end of March.
- Warren Buffett’s Berkshire Hathaway pulled back on its pharmaceutical bets. Its Bristol-Myers Squibb investment was cut and the firm also scaled back on AbbVie. Its filing also no longer showed a stake in Biogen.
- Activist investor ValueAct Capital Management built a new stake in an undisclosed company during the second quarter. Lee Ainslie’s Maverick Capital also omitted certain confidential information from their filings. With permission from regulators, firms can temporarily conceal new positions in companies in their quarterly disclosures if, for example, they’re still building their stake.
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