Fir Tree Continues To Slash Its CDK Global Inc (CDK) Holding

The sales are not entirely surprising and are likely little more than profit taking, as CDK Global Inc (NASDAQ:CDK)’s stock has appreciated by over 65% since its IPO in late September, and grown steadily throughout the year until the current quarter, during which it has declined slightly. Fir Tree was the second fund in our database to have taken a large position in the new company in late 2014 following on the heels of Scott Ferguson‘s Sachem Head Capital taking a large stake of 12.65 million shares in early October. Sachem Head Capital holds nearly the same-sized position through June 30, with over 45% exposure to the stock in its public equity portfolio, which contains just six positions.

While Sachem Head Capital has remained stalwart, the smart money appears to collectively be leaning on the side of caution now after the steady gains, with 44 hedge funds tracked by Insider Monkey holding $2.83 billion in CDK Global Inc (NASDAQ:CDK)’s shares on June 30, only a marginal increase from the $2.79 billion in shares that 45 funds held on March 31, and that during a quarter in which the stock gained over 15%. This suggests that there was a notable sell-off of about $400 million worth of shares during the quarter by the funds we track, of which Fir Tree’s sales account for only a small portion of. The declining sentiment has been proven correct thus far, as shares are down by 5% in the third quarter.

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