Billionaire Chase Coleman’s Tiger Global Cuts Exposure to Tech Stocks amid 22% Drop in Q1

Tiger Global Management was founded in 2001 by Chase Coleman, an understudy of the legendary investor Julian Robertson. When the latter closed his fund, Tiger Management, in 2000, he entrusted Coleman with $25 million in seed money for his new fund, Tiger Global. Since then, the fund has grown to manage more than $32 billion worth of assets. The first quarter was a miserable one for Tiger Global, as its equity portfolio generated a loss of 22%, according to a report by the Wall Street Journal. Coleman’s huge bets on technology boom have gone sour and have generated more than $1 billion in losses for his fund. As a result, Tiger Global reduced its exposure to the sector, which now accounts for 22% of its equity portfolio, down from 28% a quarter before. Let’s have a look at five of the fund’s biggest moves heading into the second quarter.

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Cut Stake In Chinese E-commerce Firm

A former top equity bet, JD.Com Inc (ADR) (NASDAQ:JD) has fallen out of favor with Chase Coleman and Tiger Global reduced its stake in the Chinese e-commerce giant by 27% during the first quarter. According to its latest 13F filing, the fund now holds a little over 44 million shares worth $1.16 billion. Another Tiger Cub, Andreas Halvorsen has a different opinion about JD.Com Inc (ADR) (NASDAQ:JD). His fund, Viking Global, initiated a new position in the stock during the quarter, having amassed a little over 15 million shares worth $399 million. The stock has fallen by 18% during the first quarter and continued to depreciate into the current quarter and are currently down by 24% year to date. Analysts at Credit Suisse have recently downgraded the stock to ‘Neutral’ from the previous ‘Outperform’ rating and have reduced their price target to $21.00 per share from $38.00. JD.Com Inc (ADR) (NASDAQ:JD) latest earnings report was not flattering as the numbers started to reflect the slowdown in China’s economic growth. Revenues came in at $8.27 billion, below analysts’ consensus of $8.33 billion, as the amount of goods (gross merchandise volume) sold via the platform rose by only 55% year over year, down from 69% in the previous quarter.

Reduced Stake in Online Travel Company

Coleman and his team have also decided to cut exposure to Priceline Group Inc (NASDAQ:PCLN) and have reduced the fund’s holding of the stock by 28% to 550,898 shares. At the end of the first quarter, this position was reportedly worth approximately $710 million. In the mean time, Lee Ainslie and Maverick Capital were buying Priceline shares left and right, boosting their investment to 262,612 shares worth $338 million. Priceline Group Inc (NASDAQ:PCLN) stock stumbled in the beginning of May despite better-than-expected results for the first quarter. The problem was the company’s outlook for the second quarter: earnings between $11.60 and $12.50 per share, while analysts had projected $14.98 per share. For the first quarter, Priceline Group Inc (NASDAQ:PCLN) reported revenues of $2.15 billion and a profit of $10.54 per share, topping Wall Street’s estimates of $9.66 per share on $2.12 billion in revenues. The stock is currently trading at a trailing P/E ratio of 25, below industry average P/E of 37 as reported by Yahoo! Finance.

Amazon out of Favor

Tiger Global has also dumped 68% of its stake in Amazon.com, Inc. (NASDAQ:AMZN), which represented its largest position at the end of the fourth quarter. According to its latest 13F filing, the fund now holds 1.04 million shares valued at $618 million. Alex Snow and his fund, Lansdowne Partners, are betting big on Amazon.com, Inc. (NASDAQ:AMZN) having invested more than 10% of their capital in the e-commerce giant. According to its quarterly report, Lansdowne Partners currently holds 2.2 million shares of Amazon, up by 19% from the previous quarter and valued at $1.31 billion. Although it fell by more than 25% in the first few weeks of 2016, the stock quickly recovered the lost ground and is now 8.3% in the green for the year. A big boost to the current rally was provided by the company’s financial success in the first quarter. Amazon.com, Inc. (NASDAQ:AMZN) posted a profit of $513 million or $1.07 per share and $29.13 billion in revenue, smashing through analysts’ expectations of $27.98 billion in revenue and $0.58 per share. This was also a huge jump from the $0.12 per share loss reported for the same quarter in 2015. Operating cash flow rose by 44%, while revenue generated by the cloud business surged by 64%, making it the company’s most profitable business.

Followed Icahn’s Lead On Apple

With regard to Apple Inc. (NASDAQ:AAPL), Coleman and his team were not so drastic as Carl Icahn. However, they still nearly halved their position amid widespread concerns over the company’s ability to grow, particularly in China. Following this move, Tiger Global was left with 5.65 million shares worth $616 million. One of the biggest surprises offered by the latest wave of 13F filing was Berkshire Hathaway’s $1.07 billion new position in Apple Inc. (NASDAQ:AAPL). Not a fan of the technology sector, Warren Buffett has said many times he does not invest in companies he does not understand. This time, however, the position that amounts to 9.81 million shares was initiated by one of his “lieutenants.” Although it ended the first quarter on a slightly positive note, Apple Inc. (NASDAQ:AAPL) stock has fallen off a cliff in the second quarter. First came the earnings report that showed a decline in revenues for the first time since 2003. Then Carl Icahn, one of the company’s strongest and loudest supporters, announced his exit from the position. The stock took a nosedive and is now down by 8.5% for the year.

The boost in Tiger Global’s holding of Charter Communications, Inc. (NASDAQ:CHTR) is one of the few bullish moves made by the fund’s management during the first quarter. Worth approximately $397 million, the fund’s stake in the provider of cable services amounts to 1.96 million shares, up by 181% from the end of the fourth quarter. The largest stake in Charter Communications, Inc. (NASDAQ:CHTR) among the funds followed by Insider Monkey is held by Buffett’s Berkshire Hathaway and amounts to 10.3 million shares, up by 1% over the quarter, worth some $2.09 billion. So far this year, the stock has surged by roughly 13% and has ended yesterday’s trading session at $203.60 per share. Charter Communications, Inc. (NASDAQ:CHTR) has recently received the green light from the California Public Utilities Commission to complete the proposed takeover of Time Warner Cable Inc (NYSE:TWC), as the company is looking to strengthen its position against rival Comcast Corporation (NASDAQ:CMCSA). Charter Communications agreed to buy Time Warner Cable in May 2015 in a cash and stock deal worth $56.7 billion.

Disclosure: none.