Daniel S. Och‘s OZ Management has initiated a stake in the cratering Bitauto Hldg Ltd (ADR) (NYSE:BITA), purchasing some 3.31 million shares valued at $154.61 million of the company, according to a recent 13G form filed with the Securities and Exchange Commission. The holding amasses about 5.22% of the $2.80 billion company’s outstanding shares.
The New York-based Och-Ziff Capital Management, or OZ Management for short, is one of the world’s largest hedge funds, with about $67.1 billion in regulatory assets under its management. The investment firm, which was established in 1994, employs a multi-geography approach and also has offices in London, Mumbai, Beijing, and Hong Kong. The technology sector constitutes about 20% of the firm’s public equity portfolio.
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Bitauto Hldg Ltd (ADR) (NYSE:BITA), the operator of the bitauto.com and taoche.com websites, which provide information on new and used automobiles along with promotions and consumer feedback of China’s automotive industry, has been hit hard by the recent sell-off on the Shanghai Stock Exchange and an overall weakness in the Chinese economy.
However, there are certain trends that point to the growth of internet companies like Bitauto, chief among them being a rise of over 35% in Chinese e-commerce activity on a year-to-date basis. Moreover, the company posted a strong performance in the first quarter, with a top line growth of 98.4% compared to the same quarter last year, and gave a very promising outlook for the second quarter as well. The company also formed partnerships with other leading e-commerce players, including JD.com and Tencent in January of this year, which will pay greater dividends moving forward. William Li, Bitauto Hldg Ltd (ADR) (NYSE:BITA)’s CEO plans to invest heavily in the company’s online and offline infrastructure in the future, which is just one of the reasons why OZ Management believes that the current slide of Bitauto’s stock presents an interesting investing opportunity.
Bitauto Hldg Ltd (ADR) (NYSE:BITA)’s stock has depreciated by almost 34% so far this year, while its performance over the last twelve months is slightly better, with losses amounting to nearly 18%. This is in stark comparison to the 3.16% year-to-date gains in the internet content & information industry, and to its upward climb of more than 17% over the last year.
Considering the downhill trajectory of Bitauto Hldg Ltd (ADR) (NYSE:BITA)’s stock price it is not surprising that professional money managers have been bearish on the stock. At the end of the first quarter a total of just 12 hedge funds among those that we track, had an aggregate investment of $404.30 million in the company, compared to 17 firms with $584.47 million in holdings at the end of the previous quarter. Tiger Global Management, which is led by Chase Coleman, and William Von Mueffling‘s Cantillon Capital Management were the largest stockholders of Bitauto Hldg Ltd (ADR) (NYSE:BITA) among these funds, as of March 31 Their respective stakes amounted to 5.92 million shares valued at $301.36 million, and 1.48 million shares valued at $75.25 million.
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