Tiger Global bought about 8.5 million shares of Pandora
While keeping its Groupon stake intact, Tiger Global built a position in Internet radio company Pandora, buying about 8.5 million shares.
Like Groupon, Pandora has performed terribly since going public. Shares traded as high as $20 before falling to about $7.50 last November. Pandora has steadily reported loss after loss in nearly every quarter since going public, while rumors of a forthcoming competitor from tech giant Apple Inc. (NASDAQ:AAPL) have periodically led to short-term sell-offs.
Pandora is fairly heavily shorted — more than one-fifth of shares have been sold short — as investors remain skeptical of the company’s long-term viability.
But like Groupon, Tiger Global was willing to take a chance on a hated company. If the fund still holds shares of Pandora, it’s likely sitting on a large profit — shares are up nearly 40% since the turn of the year, and rallied an additional 5% Thursday.
Risk-averse investors might do well to stay away, particularly after such a tremendous rally in the last six weeks alone. That said, Tiger Global’s investment shows that buying shares of a company everyone seemins to hate can work out.
Tiger Global gives up on Facebook
As previously mentioned, Tiger Global was involved in Facebook prior to the company going public. In the social network’s IPO, Tiger Global sold about half its stake.
Since then, it has aggressively traded Facebook. In the third quarter of 2012, for example, Tiger Global bought back many of the shares it had sold in the IPO, adding 9.79 million shares. Now, the fund has apparently exited Facebook entirely.
With Facebook shares up about 7% since the turn of the year, that was likely a mistake. But given the fund’s propensity to shift its Facebook holdings around, it’s possible that the fund added shares to its portfolio in just the last six weeks.
Since Tiger Global is so apt to move in and out of Facebook, there probably isn’t a lot investors can take away from this part of the fund’s filing, except that Tiger Global doesn’t seem to believe the company is ripe for a long-term investment.
The bottom line
Looking at Tiger Global’s filing, investors might conclude that the bottom is in for both Pandora and Groupon — two of 2011’s most hated IPOs. Facebook, however, might still have room to fall from here.
Of course, it’s important to note that blindly following 13F filings is a mistake. They are outdated and fail to present a complete picture of a fund’s holdings. Further, as Tiger Global is apt to aggressively trade its positions, it’s possible that the fund might have significantly changed its positions in just the last six weeks.
At any rate, for investors who like to trade hot tech stocks, Tiger Global’s 13F filings should be mandatory reading.
The article Chase Coleman’s Tiger Global Likes Groupon and Pandora, Not Facebook originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
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