Billionaire Dan Loeb Adds Facebook, Monsanto to Third Point’s Portfolio in Q2

Billionaire Dan Loeb is the founder of New York-based Third Point LLC, an asset management firm with $17 billion assets under management. The well-known money management firm predominantly employs an event-driven, value-oriented investing approach. Mr. Loeb, the firm’s Chief Executive Officer, has around three decades of experience in financial markets, particularly in special situation equities, distressed debt and risk arbitrage.

During the first quarter of 2016, viewed by Mr. Loeb as “one of the most catastrophic periods of hedge fund performance that we can remember since the inception of this fund,” the New York-based asset manager was down 2.3% versus the 1.3% gain for the S&P 500 Index. The multi-billion-dollar investment firm returned 4.6% in the second quarter, bringing the firm’s return for the first half of 2016 into positive territory at 2.2%. Despite the disappointing performance delivered thus far in 2016, Third Point LLC generated an annualized return of 15.8% since 1996, doubling the 7.3% return delivered by the S&P 500 gauge over the same time span. As billionaire Dan Loeb and his team already compiled and filed their quarterly 13F for the second quarter, this article will list a set of five new additions made to their portfolio during the June quarter.

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#5. Shire PLC (ADR) (NASDAQ:SHPG)

– Shares Owned by Third Point LLC (as of June 30): 950,000
– Value of Third Point LLC’s Holding (as of June 30): $174.88 Million

Third Point LLC had a new stake of 950,000 American Depository Shares of Shire PLC (ADR) (NASDAQ:SHPG) in its portfolio at the end of the second quarter of 2016, valued at $174.88 million on June 30. The new position accounted for 1.7% of the asset manager’s entire portfolio. In early June, the Irish-headquarter global specialty biopharmaceutical company completed the $32.4 billion-acquisition of Baxalta, a global innovative biopharmaceutical leader focused on creating treatments in areas such as hematology, immunology and oncology. The deal created the world’s biggest rare-disease drugmaker. At closing, Baxalta shareholders received $18 in cash and 0.1482 of Shire ADSs for each Baxalta share. As Third Point had 6.00 million shares of Baxalta in its portfolio at the end of the first quarter, the aforementioned Shire stake predominantly consists of ADSs received as part of the Shire-Baxalta deal. Shire’s ADS is around 3% in the red year-to-date. Ken Griffin’s Citadel Advisors LLC owns nearly 388,000 ADSs of Shire PLC (ADR) (NASDAQ:SHPG) as of the end of the second quarter.

#4. Sherwin-Williams Co (NYSE:SHW)

– Shares Owned by Third Point LLC (as of June 30): 700,000
– Value of Third Point LLC’s Holding (as of June 30): $205.57 Million

The New York-based asset manager also added a 700,000-share position in Sherwin-Williams Co (NYSE:SHW) to its pool of holdings during the three months that ended June 30, which was valued at $205.57 million. The position made up around 2.0% of the firm’s overall portfolio. In March, the Cleveland-based paint and coatings manufacturer inked an agreement to purchase fellow paint maker Valspar Corp (NYSE:VAL) for $113 per share in cash, with the overall purchase price reaching about $9.3 billion. Although the two companies anticipate antitrust regulators to approve the merger without requiring the sale of any businesses or require minimal divestitures, the purchase price could fall to a much lower figure of $105 per share should regulators force the two companies to divest assets representing more than $650 million in annual net sales. The multi-billion-dollar merger will yield $280 million annual cost synergies within two years, with the long-term cost synergy target being $320 million. The shares of Sherwin-Williams are 14% in the green year-to-date. Marshall Wace LLP, founded by Paul Marshall and Ian Wace, reported ownership of 534,523 shares of Sherwin-Williams Co (NYSE:SHW) through the latest round of 13Fs.

#3. Monsanto Company (NYSE:MON)

– Shares Owned by Third Point LLC (as of June 30): 2.00 Million
– Value of Third Point LLC’s Holding (as of June 30): $206.82 Million

The multi-billion-dollar asset manager run by Dan Loeb snatched up a 2.00 million-share stake in Monsanto Company (NYSE:MON) during the April-to-June period, worth $206.82 million on June 30. German chemical company Beyer AG could be considering making a higher offer for the U.S. provider of agricultural products for farmers, after Monsanto has rejected several offers already. In July, the U.S. seed company turned down a sweetened $125-per-share offer, saying it was “financially inadequate.” Bayer also offered a $1.5 billion reverse break-up fee. Fresh media reports say Bayer AG signed confidentiality agreements to conduct due diligence on the maker of Roundup weed killer and other farm products, a process that could last several weeks. A possible combination between the two companies would create the largest producer of seeds and pesticides in the world. Monsanto shares have gained 6% since the start of the year. Jim Simons’ Renaissance Technologies LLC has 526,600 shares of Monsanto Company (NYSE:MON) in its portfolio as of June 30.

#2. Charter Communications Inc. (NASDAQ:CHTR)

– Shares Owned by Third Point LLC (as of June 30): 1.45 Million
– Value of Third Point LLC’s Holding (as of June 30): $331.53 Million

Charter Communications Inc. (NASDAQ:CHTR) was yet another new addition to Third Point LLC’s portfolio during the June quarter, with the position being comprising 1.45 million shares valued at $331.53 million. The holding was the sixth-largest in Third Point’s portfolio at the end of June. Charter Communication became the second-largest U.S. cable provider after completing the multi-billion-dollar takeover of Time Warner Cable and Bright House Networks. The merger between Charter, the fourth-largest cable company in the U.S., and Time Warner, the second-largest cable company in the nation, created a more powerful contender to compete against market leader Comcast Corporation (NASDAQ:CMCSA), and other industry rivals. Cable companies are not only competing amongst themselves, as the are also fighting fast-toughening competition from online video streaming giants such as Netflix Inc. (NASDAQ:NFLX) and Hulu. Citadel Advisors LLC owns 1.41 million shares of Charter Communications Inc. (NASDAQ:CHTR) as of the end of the June quarter.

#1. Facebook Inc. (NASDAQ:FB)

– Shares Owned by Third Point LLC (as of June 30): 3.75 Million
– Value of Third Point LLC’s Holding (as of June 30): $428.55 Million

Last but certainly not least, billionaire Dan Loeb and his team acquired a new stake of 3.75 million shares of Facebook Inc. (NASDAQ:FB) during the second quarter of 2016, valued at $428.55 million. The Facebook position was the fourth-largest in Third Point’s set of holdings at the end of June, accounting for 4.1% of the firm’s entire portfolio. Facebook recently released a stronger than anticipated second-quarter earnings report, which showed that total revenue grew 59% year-on-year to $6.44 billion. Meanwhile, the social network’s user base continues to enjoy strong growth. For instance, Facebook had 1.71 billion monthly active users during the second quarter, up 15% year-on-year. Similarly, mobile MAUs were 1.57 billion, an increase of 20% year-over-year. More importantly, not only is the tech giant expanding its user base each quarter, but the average revenue per user keeps increasing as well. The company’s ARPU jumped by 38.4% year-on-year during the second quarter. Facebook shares are up 19% so far in 2016. Philippe Laffont’s Coatue Management cut its stake in Facebook Inc. (NASDAQ:FB) by 26% during the June quarter to 4.23 million shares.

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