Below we look into why Brazilian Billionaire Jorge Paulo Lemann Has Lost Faith in These 5 Tech Stocks. For further background on the Brazilian investor as well as insight into the tech stocks he’s currently bullish on, check out Brazilian Billionaire Jorge Paulo Lemann Loves These 5 Tech Stocks.
5. ZoomInfo Technologies Inc. (NASDAQ:ZI)
Former Value of 3G Capital‘s 13F Position: $6.42 million
Number of Hedge Fund Shareholders (as of March 31): 51
Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), and Snowflake Inc. (NYSE:SNOW) are some of the favorite tech stocks owned by Brazilian billionaire investor Jorge Paulo Lemann.
On the other hand, ZoomInfo Technologies Inc. (NASDAQ:ZI) kicks off the list of 5 tech stocks that Jorge Paulo Lemann has lost faith in. While the position was by far his smallest as of the end of 2021, he had held it since the second quarter of 2020, so there was ongoing conviction in the stock throughout the pandemic. That now appears to have waned, as he sold off all 100,000 of his fund’s ZI shares. Mizuho cut its price target on ZoomInfo to $60 from $85 back in late January.
ZoomInfo Technologies Inc. (NASDAQ:ZI) recently came under fire in a short report released by Wolfpack Research, which claimed the company’s so-called “proprietary insights” that fuel its contacts database are actually being culled from OxyLeads (now Coresignal) through a pass-through entity that is owned by the ZoomInfo CEO’s college roommate. OxyLeads came under fire for its connection to a data breach involving hundreds of millions of profiles in 2019, which appeared to reveal that the company illegitimately scraped its profile data from LinkedIn.
ZoomInfo disputes the accuracy of the WolfPack Research report. In comments made to Insider Monkey, a company spokesperson stated that less than .01% of the data ZoomInfo collects is obtained through Coresignal, all of which is publicly available employment data that does not include any contact information. The spokesperson added that the vast majority of the company’s data collection efforts are done in-house.
A fund that hasn’t lost faith in ZoomInfo Technologies Inc. (NASDAQ:ZI) is the Baron Global Advantage Fund, which believes the company can become much larger over time. It had this to say about the AI business insights company in its Q1 2022 investor letter:
“ZoomInfo Technologies Inc. operates a cloud-based B2B platform that provides sales, marketing, and HR teams with comprehensive business intelligence, enabling shorter sales cycles and higher win rates. While the stock was down 7% over the course of the first quarter, well-timed purchases turned it into a contributor that added 18bps to absolute returns. The company continues to execute well with another positive quarterly earnings surprise and strong forward bookings, with 2021 revenues growing 57% year-over-year, and with 46% free-cash-flow margins. New products are starting to build momentum, and we believe ZoomInfo can become a much larger company over time as it penetrates its $70 billion total addressable market.”
4. Amplitude, Inc. (NASDAQ:AMPL)
Former Value of 3G Capital‘s 13F Position: $15.9 million
Number of Hedge Fund Shareholders (as of March 31): 23
3G Capital built a new stake in Amplitude, Inc. (NASDAQ:AMPL) during Q4, buying an even 300,000 shares of the SaaS provider. Hedge fund ownership of AMPL ticked up during Q1 despite 3G Capital making a quick exit from the stock, as it sold off all 300,000 of its shares.
Amplitude, Inc. (NASDAQ:AMPL) is making several upgrades and additions to its cloud-based digital products optimization service. The company recently unveiled a new customer data platform that will become available in the current quarter and which integrates directly with its analytics service.
Amplitude, Inc. (NASDAQ:AMPL) has grown its customer count to 1,701 as of the first quarter of this year, a 33% increase from three quarters earlier. Revenue is growing even faster thanks in part to a solidly rising net revenue retention rate, with that marker hitting 126% in Q1, up from 119% in Q2 2021. Revenue for the latest reported quarter grew by 60% year-over-year to $53.1 million.
3. DoorDash, Inc. (NYSE:DASH)
Former Value of 3G Capital‘s 13F Position: $19.3 million
Number of Hedge Fund Shareholders (as of March 31): 52
3G Capital raised its stake in DoorDash, Inc. (NYSE:DASH) by 9% to 130,000 shares during Q4 but pivoted away from the company in Q1, unloading its entire position. Despite the recent turbulence among tech growth stocks, which has led to a lot of selling among hedge funds, DoorDash is one stock they haven’t lost faith in, as the number of hedge funds long DASH remained unchanged quarter-over-quarter at 52.
Fears that DoorDash, Inc. (NYSE:DASH) could be susceptible to a post-pandemic decline in consumer food ordering behavior appear to be waning, as recent data and surveys suggest more people are using food delivery platforms than ever, with spending likewise expected to increase this year compared to last. DoorDash is in a great position to capitalize on that as the leading food delivery platform in the United States, holding 59% market share.
Raymond James recently initiated coverage of DoorDash, Inc. (NYSE:DASH) sans price target, with a ‘Market Perform’ rating. The firm believes DoorDash can grow revenue at a 15% rate annually over the longer-term. However, while it has a positive outlook on the company’s fundamentals, it also believes the current risk/reward to be balanced, even in light of DASH shares being down by 53% this year.
2. Docebo Inc (NASDAQ:DCBO)
Former Value of 3G Capital‘s 13F Position: $28.9 million
Number of Hedge Fund Shareholders (as of March 31): 11
Hedge fund ownership of Docebo Inc (NASDAQ:DCBO) surged to an all-time high in the third quarter of 2021, during which time 3G Capital was also further building up its stake in the company. Several hedge funds cut ties with the stock in Q4 though and 3G Capital followed suit in Q1, unloading its 430,000 shares.
Docebo Inc (NASDAQ:DCBO), which operates an artificial intelligence social learning platform, has enjoyed strong growth in recent quarters, though some analysts are skeptical about the company’s ability to continue scaling and growing near current rates. Docebo grew its customer count to 2,947 as of the end of March, up from 2,333 a year earlier.
Docebo Inc (NASDAQ:DCBO) also grew annual recurring revenue by 55% to $129.3 million during the quarter, a strong start to the year in light of Canaccord predicting just 43% ARR growth for the company this year. The company does spend a significant chunk of its income on marketing initiatives however, which has dented profitability and could indicate the relative difficulty and costliness of Docebo’s customer acquisition initiatives.
1. Sea Limited (NYSE:SE)
Former Value of 3G Capital‘s 13F Position: $67.1 million
Number of Hedge Fund Shareholders (as of March 31): 77
3G Capital is far from the only hedge fund that’s lost faith in Sea Limited (NYSE:SE) in recent quarters, as there’s been a 36% decline in ownership of SE since the end of Q3 2021. 3G Capital sold off its entire 300,000-share position in Sea Limited during the first quarter. Lee Ainslie’s Maverick Capital and Andreas Halvorsen’s Viking Global were also among the dozens of other hedge funds to unload their SE stakes during Q1.
While Sea Limited (NYSE:SE) is spending wads of money on its growth, that growth is impressive, coming in at 64% in terms of revenue in Q1. The company’s ecommerce platform Shopee grew revenue to $1.5 billion, while its gaming division’s revenue hit $1.1 billion. Those two platforms are working in tandem to promote and power the company’s Sea Money finance platform, which grew revenue by 363% in Q1, while active users surged by 78%. On the down side, the gaming division lost 5% of its active users, a trend which could eventually weigh on the company’s other segments should it persist.
The Baron New Asia Fund also lost faith in Sea Limited (NYSE:SE) during the first quarter and detailed some of the reasons why in its Q1 2022 investor letter:
“Sea Limited, a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long-term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out Billionaire Richard Chilton Is Selling These 10 Tech Stocks and Best Dividend Stocks to Buy Now According to The Zacks Rank.
Disclosure: None.
