In this article, we discuss the 9 stocks Masayoshi Son is selling in 2022.
Masayoshi Son is the man behind SoftBank, an investment and telecommunications media giant based in Tokyo. The $66 billion conglomerate was founded in 1981, and has since grown to become one of the most renowned investing giants in the world. Son is a third generation “Zainichi Korean”- people who immigrated from Korea to Japan before 1945- and is now the second richest man in Japan with personal net worth of around $22 billion. At the age of 16, he sought career advice from the then-president of McDonald’s Japan, Fujita Den, who advised him to learn English and study computer science. Son subsequently left for the United States, and graduated with B.A. in Economics from University of California, Berkeley, in 1980.
Son moved back to Japan and laid the foundation for SoftBank Corporation in 1981. During his time at university in California, he made money from a number of tech-focused ventures, which included building an electronic translator that he sold to Sharp Corporation for $1.7 million. SoftBank invested in a lot of technology and internet firms in the period leading up to the dotcom crash of 2000, where he lost upwards of $700 million. But he saved his fortunes with a $20 million investment in Alibaba Group Holding Limited (NYSE:BABA) in 2000, a stake that was worth up to $130 billion in 2018, and stands as one of the most profitable investments ever made.
SoftBank established Vision Fund in 2017, which was a tech-focused fund with a $100 billion commitment by backers which included the sovereign wealth fund of Saudi Arabia and tech giant Apple Inc. NASDAQ:AAPL), among others. The Vision Fund invested in a multitude of technology startups around the world, which included Uber Technologies, Inc. (NYSE:UBER), Indian firm Paytm, and Chinese ride-sharing firm DiDi Global Inc. (NYSE:DIDI). But a spate of bad decisions, such as putting money into companies with an unclear path towards profitability, put the Vision Fund in a negative spotlight. And this risk was doubled as China started a crackdown against big tech giants under their vision of ‘Common Prosperity’ to reorganize society on a more equal footing. In the current climate where risky, growth stocks are getting butchered in the market, SoftBank’s Vision Fund reported in May net losses of $26.2 billion, and the billionaire Masayoshi Son pledged that his fund would “play defense” at a time when the global economy is in a state of upheaval.
According to regulatory filings for the first quarter, SB Management has $515.8 million in assets under management (AUM). It is a wholly owned subsidiary of SoftBank, and invests primarily in the finance, healthcare and technology sectors. Many investors are turning towards solid names such as The Walt Disney Company (NYSE:DIS), Apple Inc. (NASDAQ:AAPL) and Mastercard Incorporated (NYSE:MA), whilst disposing of stocks deemed risky in the current climate. In this article, we’ll be focusing on the stocks sold by Masayoshi Son in the first quarter of 2022.
Masayoshi Son of SB Management
Our Methodology
Masayoshi Son’s Q1 2022 portfolio was studied to pick the stocks in which the billionaire reduced/exited his stake. Elite funds spend billions of dollars and use some of the best brains to pick stocks for their clients. Insider Monkey believes imitating their stock picks is a wise strategy. That’s why we have provided hedge fund sentiment around each stock, which has been derived from Insider Monkey’s database of 900+ hedge funds tracked at the close of the first quarter of 2022.
Masayoshi Son is Selling These 9 Stocks in 2022
9. Pacific Biosciences of California (NASDAQ:PACB)
Number of Hedge Fund Holders: 22
Change in Stake: -77%
Pacific Biosciences of California (NASDAQ:PACB) is a California-based company which provides an integrated platform used for genetic analysis. Its products include analytical software, single molecule real-time (SMRT) compatible products, and PacBio Systems that are used to analyze biochemical sequencing reactions.
At the close of Q1 2022, Masayoshi Son owned 1.88 million shares of Pacific Biosciences of California valued at $17.16 million. This represented 3.32% of the billionaire’s total portfolio, and was a decrease of 77% in holding over the previous quarter. Cathie Wood’s ARK Investment Management was the largest shareholder of Pacific Biosciences of California in the first quarter with a stake worth approximately $248 million.
Cantor Fitzgerald analyst Ross Osborn in early May reiterated an ‘Overweight’ rating on Pacific Biosciences of California shares, and revised the price target to $19 from $23. He urged investors to benefit from the company’s attractive valuation, given its strong cash balance and a product pipeline which looks set to significantly expands its total addressable market in the future.
22 hedge funds were long Pacific Biosciences of California at the end of the first quarter of 2022, with combined stakes worth $481.5 million. In contrast, 21 hedge funds held positions in the company a quarter ago.
DEVON Equity Management, an investment firm, highlighted a few stocks in its Q2 2021 investor letter, and Pacific Biosciences of California featured among them. The fund said:
“As a final word on Sequencing – we established a position in Pacific Biosciences (PACB US) during the quarter. Pac Bio are the leader in Long Read Sequencing (Illumina are dominant in Short Read). The Long Read market is far less developed than short read, but our continued research into the genomic sequencing field increased our confidence in the commercial viability for Long Read Sequencing in the coming years. We will discuss the investment case for Pac Bio in more detail in a future letter.”
8. AbCellera Biologics Inc. (NASDAQ:ABCL)
Number of Hedge Fund Holders: 17
Change in Stake: -21%
AbCellera Biologics Inc. (NASDAQ:ABCL) deals in the development of an AI-powered platform which is used for antibody discovery. It has developed Covid antibody treatment drug called Bebtelovimab in collaboration with Eli Lilly And Co (NYSE:LLY), which in February received the FDA Emergency Use Authorization for use against mild-to-moderate Covid.
Masayoshi Son decreased his stake in AbCellera Biologics Inc. by 21% in the first quarter of 2022, coming in at 7.76 million shares worth $75.7 million. Baker Bros. Advisors was the largest shareholder of the firm at the close of Q1 2022, with a $101.9 million stake comprising of 10.45 million shares.
AbCellera Biologics Inc. posted EPS of $0.54 in the first quarter, beating analysts’ estimates by $0.12. Quarterly revenue was recorded at $316.6 million and outperformed analysts’ forecasts by $96.8 million.
At the close of the first quarter, 17 hedge funds held stakes in AbCellera Biologics Inc., as compared to 18 hedge funds in the previous quarter.
On May 11, Piper Sandler analyst Do Kim reiterated an ‘Overweight’ rating on AbCellera Biologics Inc. shares, and decreased the price target to $21 from $28 on the back of higher interest rates. The analyst noted that the company beat Q1 estimates due to higher royalty revenue from its Covid antibody sales.
7. Sema4 Holdings Corp. (NASDAQ:SMFR)
Number of Hedge Fund Holders: 38
Change in Stake: -18%
Next up is Sema4 Holdings Corp. (NASDAQ:SMFR), a health intelligence company which uses artificial intelligence to develop next-gen diagnostics for the healthcare industry. Masayoshi Son dumped 1.57 million shares of the company during the first quarter, bringing his stake to 7.45 million shares worth $22.9 million, representing 4.43% of his total portfolio.
On May 16, Cowen analyst Max Masucci kept an ‘Outperform’ rating on Sema4 Holdings Corp. shares, whilst decreasing the price target to $5 from $13. In early May, the company announced that it had acquired genetic testing company GeneDx from OPKO Health (OPK) in a deal worth nearly $472 million, including potential milestones.
Of the 900+ elite hedge funds tracked by Insider Monkey, Sema4 Holdings Corp. shares were found in the portfolios of 38 hedge funds at the close of the first quarter of 2022. Deerfield Management was the leading shareholder of the company, with 13.84 million shares valued at $42.5 million.
Sema4 Holdings Corp. disclosed earnings per share of -$0.27 in the first quarter, a figure which beat market estimates by $0.01. The revenue of $53.9 million for the quarter also exceeded analysts’ forecasts by $3.77 million.
6. Lyell Immunopharma, Inc. (NASDAQ:LYEL)
Number of Hedge Fund Holders: 7
Change in Stake: -100%
Lyell Immunopharma, Inc. (NASDAQ:LYEL) shares were completely sold off by Korean-Japanese billionaire Masayoshi Son in the first quarter of 2022. It is a cell reprogramming company which develops T cell therapies for patients with solid tumors. It was founded in 2008, and is headquartered in California.
Lyell Immunopharma, Inc. released its first quarter earnings on May 10, and disclosed earnings per share of -$0.20 which outperformed estimates by $0.08. Revenue figures missed estimates by $947,000, coming in at $553,000.
7 hedge funds held positions worth $12.6 million in Lyell Immunopharma, Inc. at the end of Q1 2022. This showed a downward trend from the previous quarter where 11 hedge funds held $47.4 million worth of stakes in the firm. MIC Capital Partners reported owning 1.32 million shares of the company at a value of $6.66 million at the end of the first quarter, making it the most prominent shareholder of Lyell Immunopharma, Inc..
5. Blue Whale Acquisition Corp I (NASDAQ:BWC)
Number of Hedge Fund Holders: N/A
Change in Stake: -100%
Masayoshi Son’s SB Management sold off the entirety of its stake in Blue Whale Acquisition Corp I (NASDAQ:BWC) during the first quarter of 2022. The firm operates as a special purpose acquisition company (SPAC) which focuses on companies in the media, entertainment and technology industries. It is backed by Mubadala Capital, which is a leading global sovereign investor headquartered in Abu Dhabi. Amid the current market selloff, all major names, including The Walt Disney Company, Apple Inc. and Mastercard Incorporated are under pressure as investors look out for value stocks to protect against a possible recession.
4. Sana Biotechnology, Inc. (NASDAQ:SANA)
Number of Hedge Fund Holders: 11
Change in Stake: -100%
Masayoshi Son completely sold off his stake in Sana Biotechnology, Inc. (NASDAQ:SANA) during the first quarter. The Seattle-based firm develops engineered cells to be used as therapies for various diseases. It is developing the technology required to create cells that can replaced diseased cells in a body, and also repair cells that are impaired/damaged.
A study of the 912 hedge funds tracked by Insider Monkey at the end of March showed that 11 hedge funds held positions in Sana Biotechnology, Inc. with a collective price tag of $32.5 million. The same number of hedge funds reported owning stakes in the company a quarter ago as well.
Woodline Partners was the biggest shareholder of Sana Biotechnology, Inc. in Q1 2022, with a position worth $12.8 million. Famed quant investor Jim Simons’ Renaissance Technologies also held a $6.9 million stake in the company.
3. Revolution Healthcare Acquisition Corp. (NASDAQ:REVH)
Number of Hedge Fund Holders: N/A
Change in Stake: -100%
Revolution Healthcare Acquisition Corp. (NASDAQ:REVH) is a special purpose acquisition company (SPAC) operating with a focus on companies in the health care, life sciences, and technology industries. It provides services such as mergers, acquisitions, share purchase, and business reorganization.
SB Management disposed off the entirety of its position in Revolution Healthcare Acquisition Corp. during the first quarter, which consisted of 3 million shares in the quarter before.
2. Nerdy, Inc. (NYSE:NRDY)
Number of Hedge Fund Holders: 28
Change in Stake: -100%
Nerdy, Inc. (NYSE:NRDY) operates an online platform where students are connected with academic experts to receive online tutoring. Its flagship brand is Varsity Tutors, where users can enroll for a variety of online classes. SB Management completely exited its position in the company during the first quarter of 2022.
On May 17, Canaccord analyst Maria Ripps lowered the firm’s price target on Nerdy, Inc. to $8 from $10 and maintained a ‘Buy’ rating on the company shares. She noted that despite near-term headwinds, the company’s decision to evolve towards a membership model should increase stability and enhance growth over time, giving it a platform to build into a large market opportunity.
For the quarter ending March, Nerdy, Inc. posted revenue of $46.9 million, above estimates by roughly $219,000. The company disclosed earnings per share in-line with estimates.
As of the end of the first quarter of 2022, Nerdy, Inc. stock was seen in the portfolios of 28 hedge funds, down from 3o in the previous quarter. The combined value of Q1 holdings stood at $169.1 million.
Baron Funds, an investment firm, talked about Nerdy, Inc. in its Q4 2021 investor letter. The fund said:
“Nerdy Inc. operates a digital learning platform in the U.S. that provides live online tutoring in multiple formats, including one-on-one and small-to-large groups. The offering includes K-12 courses, college, professional, GMAT, SAT, and other prep. Though bookings for future classes remained healthy, many sessions were delayed from the fourth quarter as families opted to take longer holiday trips and kids resumed afterschool activities, making it more difficult to schedule tutoring, resulting in weaker-than-projected recognized revenues. Given near-term uncertainty, a short-term tax loss, and other investment opportunities, we chose to exit the position.”
1. Compute Health Acquisition Corp. (NYSE:CPUH)
Number of Hedge Fund Holders: N/A
Change in Stake: -100%
Compute Health Acquisition Corp. (NYSE:CPUH) acts as a special purpose acquisition company (SPAC) operating primarily in the healthcare sector, more specifically in the medical device space, including imaging and robotics.
Masayoshi Son’s SB Management sold off its stake in Compute Health Acquisition Corp. during the first quarter, which stood at 4 million shares in the fourth quarter of 2021.
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