Light Street Capital Management is a hedge fund located in Palo Alto, California, managed by Glen Kacher. The firm invests globally in public equity markets with a focus on the technology (62%) and, to a lesser extent, media sectors. According to its last 13F filing, the fund holds more than $720 million in equities, with its most valuable stakes placed in YY Inc (ADR) (NASDAQ:YY), Facebook Inc (NASDAQ:FB) and 58.com Inc (ADR) (NYSE:WUBA). Let’s take a look at these holdings in order to elucidate if any of these companies stand as attractive investment options.
YY Inc (ADR) (NASDAQ:YY) came in first. This $5.2 billion market cap Chinese Internet services company escalated from the fourth spot in this list in the previous quarter, after Light Street boosted its exposure by 66%. The fund now owns 730,251 shares of Class A stock, worth more than $55 million, which account for roughly 7.6% of its equity portfolio’s total value.
The largest hedge fund shareholder of record at YY Inc (ADR) (NASDAQ:YY) – amongst those that we track, Philippe Laffont’s Coatue Management, also upped its bet over the second quarter, and now owns 1.5 million shares of the company.
Several reasons to invest in YY Inc (ADR) (NASDAQ:YY) exist. The company has been growing steadily and is expected to continue to do so; however, the stock traded quite low in the second quarter, following strong earnings reported a few months ago. Share repurchase programs and the company’s online education program bode well for investors. This last factor, analysts believe, has the potential to revolutionize Chinese online education.
Second in line is Facebook Inc (NASDAQ:FB), which also witnessed an increase (of 32%) in Light Street’s stake. The fund now owns 750,000 shares of Class A stock, worth more than $50 million. Philippe Laffont’s Coatue Management is, once again, the largest hedge fund shareholder of record, with 5.87 million shares, worth almost $400 million.
As most investors acknowledge, several factors make of Facebook Inc (NASDAQ:FB) an attractive investment option. As an established market leader, with a sustained growth history and plenty of room to continue to grow, the only question to ask is: is the stock worth its price?
Light Street’s third largest bet was placed on 58.com Inc (ADR) (NYSE:WUBA), a $3.7 billion market cap Chinese online marketplace operator. The company fell from the first place in the fund’s list, following an 11% decrease in its wage. The fund now holds 825,000 shares of Class A stock. On the opposite sidewalk, Keywise Capital Management, led by Fang Zheng, started a position in the company over the second quarter, with 1.78 million shares, worth almost $100 million.
In late-June, Tencent Holdings announced a $736 million investment, for roughly 20% ownership in China’s Craigslist. 58.com Inc (ADR) (NYSE:WUBA) said it would use most of the proceeds to buy back shares from its pre-IPO investors. According to Barcayls’ research, “it is highly likely that Tencent could offer and integrate 58.com services via either level 1 or lever 2 access on the WeChat platform, which we believe would in no doubt help 58.com to increase its mobile user penetration and user stickiness.”
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
