Should You Continue Holding Your Pinduoduo (PDD) Shares?

Tao Value, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of -4.82 percentage points was delivered by the fund for the fourth quarter of 2021, underperforming its benchmark, the MSCI All Country World Index which delivered +6.98 percentage points for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Tao Value, in its Q4 2021 investor letter, mentioned Pinduoduo Inc. (NASDAQ:PDD) and discussed its stance on the firm. Founded in 2015, Pinduoduo Inc. (NASDAQ:PDD) is a Shanghai, China-based e-commerce platform with a $50.1 billion market capitalization, and is currently spearheaded by its CEO, Lei Chen. Pinduoduo Inc. (NASDAQ:PDD) delivered a -31.41% return since the beginning of the year, while its 12-month returns are down by -70.61%. The stock closed at $39.99 per share on March 21, 2022.

Here is what Tao Value has to say about Pinduoduo Inc. (NASDAQ:PDD) in its Q4 2021 investor letter:

“On the detracting side, one of our largest detractors includes Pinduoduo (ticker: PDD). Pinduoduo (PDD) reported the second consecutive GAAP profit quarter yet missed on the revenue due to nation-wide consumption weakness & scaled back Sales & Marketing efforts. Market disliked it and the stock price plunged on the earnings. In my opinion, the accounting profits proved the original thesis of using S&M to acquire users and using great shopping experience to keep them. After realizing the first growth curve, Pinduoduo now shifted its focus & investment to agriculture. It is still very early, but the reduced size due to price drop warrants a position to watch and continue grow with such a team with strong culture.”

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Our calculations show that Pinduoduo Inc. (NASDAQ:PDD) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Pinduoduo Inc. (NASDAQ:PDD) was in 34 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 49 funds in the previous quarter. Pinduoduo Inc. (NASDAQ:PDD) delivered a -32.57% return in the past 3 months.

In August 2021, we also shared another hedge fund’s views on Pinduoduo Inc. (NASDAQ:PDD) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.