Hedge Funds Seem to Side with Barron’s Regarding Alibaba and Here’s Why

As stated earlier, soon after the IPO, Alibaba Group Holding Ltd (NYSE:BABA) has started losing popularity among hedge funds. At the end of June 85 investors from our database disclosed stakes worth $4.77 billion in aggregate, down from 86 investors holding $5.80 billion worth of stock a quarter earlier. Moreover, at the end of the second quarter, these hedge funds held only 2.30% of the company. Among these investors, David Tepper’s Appaloosa Management initiated a new stake in Alibaba that contained 1.36 million shares at the end of June, but a couple of days ago, Mr. Tepper admitted that he closed his stake in the company. Three largest shareholders of Alibaba from our database at the end of June were Rob Citrone’s Discovery Capital, Andreas Halvorsen’s Viking Global, and Boykin Curry’s Eagle Capital Management, which reported stakes of 6.52 million shares, 6.04 million shares, and 6.03 million shares in their latest 13Fs respectively.

Just as a perspective, eBay Inc (NASDAQ:EBAY)  gained popularity among hedge funds during the second quarter, as the number of investors with long positions went up to 99 from 90, while the aggregate value of their holdings inched down to $11.73 billion from $11.86 billion and amassed 16% of the company at the end of June. eBay Inc (NASDAQ:EBAY) also ranked as the favorite tech stock among billionaire investors from our database, leaving Alibaba far behind on the fifth spot.

With this in mind, seeing as the stock has been losing ground lately and the negative reaction it got after Barron’s article it seems like hedge funds are right to be limiting their exposure to Alibaba Group Holding Ltd (NYSE:BABA).

Disclosure: none