Billionaire Stephen Mandel Ditches PayPal for eBay, Priceline for Expedia

Lone Pine Capital LLC is a major fund based out of Greenwich that offers its services to pooled investment vehicles, profit sharing plans and pension plans. The fund employs a long and short strategy for making investments in the global public equity markets, with a heavy inclination for information technology stocks, which account for 37% of its 13F holdings.

During the September quarter, the fund made big movements in a number of stocks including eBay Inc. (NASDAQ:EBAY), Paypal Holdings Inc (NASDAQ:PYPL), Priceline Group Inc. (NASDAQ:PCLN), Expedia Inc (NASDAQ:EXPE) and Electronic Arts Inc (NASDAQ:EA). Let’s take a closer look.

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For the quarter ended on 30^th September, 2016, Lone Pine Capital initiated a new stake in eBay Inc. (NASDAQ:EBAY) by buying 33.165 million shares, giving it a stake of $1.09 billion at the end of Q3. Although it isn’t growing as quickly as Amazon and it doesn’t have a cloud infrastructure on demand segment, eBay is solidly profitable, with analysts expecting the company to earn $2.09 per share next year. Given the expectation, eBay is one of the cheaper internet stocks on the market today. Of the 742 elite funds we track, 53 funds owned $3.71 billion of eBay Inc (NASDAQ:EBAY) and accounted for 6.40% of the float on September 30, versus 58 funds and $1.73 billion respectively on June 30.

While it may have initiated a stake in eBay, Lone Pine headed for the exits on eBay spin-off Paypal Holdings Inc (NASDAQ:PYPL) by selling all of its 11 million share position during the third quarter in the online finance giant. Although it is unclear why Lone Pine cut its position, Paypal isn’t exactly alone in the on-line finance space, with fintech startup Stripe recently reportedly raising $150 million at a $9.2 billion valuation. The emergence of competitors could cut into Paypal’s growth. The number of elite funds with holdings in Paypal Holdings Inc (NASDAQ:PYPL) fell by 10 quarter-over-quarter to 74 at the end of September.

Mandel’s fund trimmed its stake in Priceline Group Inc. (NASDAQ:PCLN) by 48% in the third quarter to 574,683 shares, good for a value of $845.6 million. Although Priceline is a great company, some bears fear the strong U.S. dollar could hurt the company’s profit overseas. Priceline could also face increasing eventual competition from AirBNB in the future. Despite the factors, shares of the company are up 19.77% year-to-date. 98 top funds had a bullish position in Priceline Group Inc (NASDAQ:PCLN) at the end of September, up 13 funds from the previous quarter.

Although Lone Pine cut its stake in Priceline, the fund is apparently not adverse to investing in travel related online stocks. The elite fund initiated a 7.14 million share position in Expedia Inc (NASDAQ:EXPE) during the third quarter, giving it a value of over $833 million and accounting for around 3.72% of the fund’s 13F  portfolio. James Lee of CLSA recently intiated coverage on the stock with an ‘Outperform’ rating and a $145 price target. The number of elite funds with holdings in Expedia Inc (NASDAQ:EXPE) fell by 5 quarter-over-quarter to 62 at the end of September.

Last but not least, Lone Pine raised its stake in gaming giant Electronic Arts Inc (NASDAQ:EA) by 142% from June through September to 8.619 million shares, good for a market value of over $736 million at the end of Q3. EA shares have had a decent 2016, rising 13.4% year-to-date. Shares trade for a reasonable 18.7 times forward earnings estimates. 61 elite funds had a bullish position in Electronic Arts Inc. (NASDAQ:EA) at the end of the third quarter, up 3 funds from the previous quarter.

DISCLOSURE – NONE