Jericho Capital Asset Management L.P. is a New York-based, technology focused hedge fund founded and managed by Josh Resnick, quite known in the media for having closed its doors to new investors over the past few years. For the second quarter of 2014, the fund disclosed an equity portfolio worth more than $1.66 billion, after the acquisition of 10 new stocks and the closing of 8 of its preexisting stakes. In this article, we will take a look at three of its tech bets, Qihoo 360 Technology Co Ltd (NYSE:QIHU), Tableau Software Inc (NYSE:DATA), and Facebook Inc (NASDAQ:FB), in order to elucidate if they stand as attractive investment options.
Qihoo 360 Technology Co Ltd (NYSE:QIHU) is first in this list (and the fund’s fourth most valuable position). This is a $10.7 billion market cap Chinese internet and mobile security company, of which Jericho Capital owns 1.24 million shares –after a 41% increase in its stake over the second quarter. The stake, worth more than $114 million, accounts for more than 6.8% of the fund’s equity portfolio’s total value.
John Burbank’s Passport Capital also seems quite bullish on Qihoo 360 Technology Co Ltd (NYSE:QIHU). The fund last declared a 31% boost in its wage on the company, and now owns 1.69 million shares.
Despite Qihoo 360 Technology Co Ltd (NYSE:QIHU)’s stock performance was weak in the second quarter, bulls continue to pile up, as the company comfortably dominates the PC antivirus market share in China, is gaining users in the search engine market –and challenging market leader Baidu Inc (ADR) (NASDAQ:BIDU), is widening its product portfolio, and ameliorating its monetization strategies.
Second in line is Tableau Software Inc (NYSE:DATA), a $4.6 billion market cap computer software company that saw Jericho increase its stake by 166% over the second quarter. The fund now owns more than 1.35 million Class A shares, worth roughly $96 million. This position makes it the second largest hedge fund shareholder of record at the company –amongst those we track, only outranked by David Goel and Paul Ferri’s Matrix Capital Management, which started a position in the company, with 1.6 million shares, over the quarter.
Close to the end of the second quarter, Tableau Software Inc (NYSE:DATA) announced the general availability of Tableau 8.2, an update allows Mac users to use Tableau, and adds a feature that helps people “tell stories with their data.” Critics have said that Tableau makes Microsoft Corporation (NASDAQ:MSFT)’s PowerPoint almost obsolete.
Last in this inventory is Facebook Inc (NASDAQ:FB), the $195 billion market cap social networking company. Between April 1 and June 30, the fund trimmed its exposure by 29%. However, it still owns 1.22 million shares of Class A stock, worth more than $82 million. Philippe Laffont’s Coatue Management holds the largest long position at Facebook Inc (NASDAQ:FB) – amongst the funds that we track, with 5.87 million shares, worth almost $400 million.
Several reasons to invest in Facebook Inc (NASDAQ:FB) exist. For starters, it still is the most popular social networking site among teenagers; and people spend more time on Facebook than any website on the Internet. In addition, the company continues to explore ways to improve its monetization skills and ad platform; despite relatively low advertising rates, its low-cost base allows it to retrieve high levels of profitability and returns on capital.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned.
