Horos Asset Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. Horos Value Internacional gained 3.5% over the quarter and is up 33.6% in 2021, compared to 1.2% and 17.3%, respectively, in its benchmark index. Horos Value Iberia gained 1.7% over the quarter and is up 20.4% for the year, beating the gains of 1.4% and 11.3%, respectively, of its benchmark. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Horos Asset Management, in its Q3 2021 investor letter, mentioned Alibaba Group Holding Limited (NYSE: BABA) and discussed its stance on the firm. Alibaba Group Holding Limited is a Hangzhou, China-based e-commerce company with a $331.0 billion market capitalization. BABA delivered a -47.54% return since the beginning of the year, while its 12-month returns are down by -53.04%. The stock closed at $122.10 per share on December 17, 2021.
Here is what Horos Asset Management has to say about Alibaba Group Holding Limited in its Q3 2021 investor letter:
“At the end of 2020, Ant Group, a Chinese payment and financial services company, was scheduled to make its stock market debut and become the largest IPO in history. This IPO was to be the culmination of the successful business career of Jack Ma, founder of the e-commerce giant Alibaba Group (“Alibaba”) and main shareholder, together with Alibaba itself, of Ant Group. However, everything went awry on October 24 of that year, when Ma delivered a speech at the Shanghai Bund Summit, a high-profile event with a global reach. At the event, the entrepreneur spoke about why the Chinese banking sector should evolve by taking advantage of advances in technology and big data, and how Ant Group would play an important role in this development. He also launched several criticisms of the Chinese banking sector and regulator, calling them “outdated” and even “inexperienced.” Thus, a direct attack on the Chinese Communist Party and its top representative, Xi Jinping.
The consequences of this bold speech? Within days, the Chinese regulator changed the rules of the game in the credit market, requiring drastic changes in Ant Group’s business model and thus forcing it to postpone its IPO. In turn, Alibaba began to be investigated for possible monopolistic practices and, to add more mystery to the matter, Jack Ma was summoned to Beijing to be questioned on certain regulatory issues, disappearing for several months from public life, which contributed (and still contributes) to fuel all kinds of rumors.4 From Ma’s speech to the stock price bottom several months later, Alibaba saw around $400 billion of its market value evaporate after correcting more than 50%.”
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Based on our calculations, Alibaba Group Holding Limited (NYSE: BABA) ranks 13th in our list of the 30 Most Popular Stocks Among Hedge Funds. BABA was in 115 hedge fund portfolios at the end of the third quarter of 2021, compared to 146 funds in the previous quarter. Alibaba Group Holding Limited (NYSE: BABA) delivered a -23.71% return in the past 3 months.
Last week, we also shared another hedge fund’s views on BABA in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.
Disclosure: None. This article is originally published at Insider Monkey.
