Hedge funds piled into Facebook amid the Cambridge Analytica scandal

Reporter
Yahoo Finance

Hedge funds loaded up on Facebook’s stock during the first quarter even as the social network became embroiled in a massive data breach scandal.

Facebook (FB) is now the No. 1 “most popular” stock position among the hedge funds after beginning the year at No. 2. Approximately 53 hedge funds initiated a new position, while 60 hedge funds added to their existing positions, according to Goldman Sachs’s Hedge Fund Trend Monitor. Of those funds, 97 own the stock as a top 10 holding.

Meanwhile, 32 hedge funds trimmed their stakes during the first quarter, while 21 dropped the position completely.

Facebook’s stock was featured prominently in the news during the first quarter after the Cambridge Analytica data breach scandal came to light and CEO Mark Zuckerberg was grilled on Capitol Hill. Since that time, shares of Facebook have rebounded.

Facebook CEO Mark Zuckerberg REUTERS/Stephen Lam/File Photo
Facebook CEO Mark Zuckerberg REUTERS/Stephen Lam/File Photo

Tiger Global, led by Chase Coleman, added 2,545,238 more shares of Facebook. Coleman’s fund is a “Tiger cub,” or a hedge fund that was seeded by legendary hedge fund manager Julian Robertson of Tiger Management.

Billionaire “Tiger cub” Andreas Halvorsen’s Viking Global also loaded up on Facebook during the first quarter, adding 5.5 million more shares, bringing the entire stake north of 9.3 million shares. Fellow “Tiger cub” billionaire Rob Citrone of Discovery Capital also added to his Facebook stake, buying 806,600 more shares, bringing the fund’s position to 1.37 million shares. Citrone’s Discover Capital also bought calls on 2.3 million Facebook shares. Facebook remained the No. 1 position for Viking and Discovery.

Daniel Loeb, the activist hedge fund manager and CEO of Third Point, added another 600,000 shares to his existing Facebook stake, bringing the total position to 4 million shares at the end of the quarter. David Tepper, the founder of Appaloosa, also boosted his Facebook stake, adding 680,559 more shares to last hold just over 6.2 million at the end of the quarter. 

Meanwhile, some prominent names, including activist hedge fund manager Barry Rosenstein’s JANA Partners and billionaire Stanley Druckenmiller’s family-office hedge fund Duquesne Capital ditched their entire stakes. 

Facebook shares have rebounded since the Cambridge Analytica scandal came to light on March 17.
Facebook shares have rebounded since the Cambridge Analytica scandal came to light on March 17.

Another noteworthy tidbit from the Goldman report is that while the quarter was characterized by volatility, hedge funds, for the most part, stayed invested.

“Hedge fund portfolio remained near record lows during the volatile Q1,” Goldman analysts wrote. “The average fund carries 68% of its long portfolio in its top 10 potions, nearly an all-time high.”

Nine of the top 10 most popular stocks held their status, with Facebook gaining the most in popularity. Meanwhile, Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL, GOOG), and Netflix (NFLX) fell in popularity, but still remained in the top 10.

Goldman Sachs tracks 848 hedge funds with $2.3 trillion in gross equity positions.


Julia La Roche is a finance reporter at Yahoo FinanceFollow her on Twitter.

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