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- Hedge-fund billionaire Seth Klarman, widely seen as “the next Warren Buffett,” bought into Google and Facebook in the first quarter.
- Klarman’s Baupost Group revealed an almost $350 million stake in Google-parent Alphabet and a $330 million stake in Facebook in a financial filing this week.
- Baupost also boosted its eBay and HP positions, slashed its stake in PG&E, and sold its $300 million in Tesla convertible bonds.
- Visit Business Insider’s homepage for more stories.
Billionaire investor Seth Klarman, nicknamed the “Oracle of Boston” for his similar approach to Warren Buffett, was far more adventurous than the Berkshire Hathaway boss in the first quarter.
Klarman’s Baupost Group acquired stakes in Google and Facebook – two fast-growing technology titans that Buffett has avoided so far – in the first quarter, according to a Securities and Exchange Commission filing this week.
Baupost bought just over 300,000 shares in Google-parent Alphabet, which were valued at almost $350 million on March 31. It also bought nearly two million Facebook shares, valued at more than $330 million.
The hedge fund ramped up several existing investments too. It doubled its stake in computing veteran HP to 20 million shares, worth almost $350 million at the end of March. It also boosted its position in e-commerce behemoth eBay by 60% to over 32 million shares – its largest holding by dollar value at $960 million.
On the other hand, Baupost exited several positions including pharmaceuticals giant Bristol Myers Squibb and hotel-and-casino group Eldorado Resorts. Moreover, it almost halved its stake in troubled energy titan PG&E.
Notably, Baupost dumped its $300 million stake in Tesla convertible bonds, ending what Bloomberg reported was a bearish bet against Elon Musk’s electric-car maker.
Overall, Baupost’s stock portfolio shrunk in value by 26% to about $6.7 billion, in large part because the coronavirus pandemic hammered stock prices.
Klarman was likely prepared for the downturn, given he warned in January that the “rocket fuel” propelling the market would run out, and said that cash made up more than 30% of Baupost’s portfolio at the end of December.
The hedge-fund manager’s focus on investing in undervalued companies isn’t the only reason he’s viewed as Buffett’s spiritual successor. When a college student asked the Berkshire boss in 1992 who might be the next Buffett, he swiftly replied “Seth Klarman,” according to the professor teaching the class.
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