Andreas Halvorsen’s Viking Global filed, today, a Schedule 13G form with the SEC disclosing a new position in Wayfair Inc (NYSE:W). According to the filing, the fund owns 1.75 million shares of Class A Common Stock, which account for 12.6% of the company’s Class A shares outstanding.
Viking Global is a hedge fund founded in 1999 by Norwegian Tiger cub Andreas Halvorsen, along with former Tiger Global employees David Ott and Brian Olson. On 2005, Mr. Olson left Viking; five years later, Mr. David Ott did the same. Between June 2005 (when Ott became the CIO of Viking) and March 2010, Viking Global returned 119% vs. 11% for the MSCI World Index. Nonetheless, lost 1.9% in 2008, but then gained 20% in 2009, and 3.8% in 2010.
Wayfair Inc (NYSE:W) is a $2.17 billion market cap e-commerce business that went public on October 2. It was the first e-commerce company that IPOed since Alibaba Group Holding Ltd (NYSE:BABA)’s NYSE listing about one moth ago. Wayfair Inc (NYSE:W)’s initial public offering comprised 12.65 million shares of its Class A common stock, sold at a price to the public of $29.00 per share. The offering was closed on October 7; 10.5 million shares were sold by Wayfair, and the remaining 2.15 million, by certain selling stockholders.
Despite a strong IPO, Wayfair Inc (NYSE:W)’s stock is down since the closing of the offering, and currently trades well below the IPO price of $29.00 per share, at approximately $26.18 per share. Despite the price drop, Wedbush analyst Seth Basham initiated coverage of the company on October 9, with an “Outperform” rating and a $40 price target for the long-term. His bullishness is based on the belief that the company offers a “compelling value position,” which will drive revenue growth.
Another major institutional investor that disclosed a big stake in Wayfair Inc (NYSE:W) is Morgan Stanley (NYSE:MS). This financial services company acknowledged holding 659,760 shares of Common Stock, which represent about 6% of the company’s outstanding stock.
But, why should you trail Mr. Halvorsen’s pick? Well, his top equity position, Walgreen Company (NYSE:WAG) and his largest consumer cyclical bet (Wayfair is also a consumer cyclical stock), Lowe’s Companies, Inc. (NYSE:LOW) have both managed to outperform the S&P 500 Index, year-to-date.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
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