The investment firm co-founded by former Vice President Al Gore recently made big changes in its stockholdings.
Generation Investment Management doubled its investment in Chinese internet giant Alibaba Group Holding (ticker: BABA) in the first quarter, and sold all its Airbnb (ABNB) stock. It also cut back on investments in Charles Schwab (SCHW) and Texas Instruments (TXN) in the quarter. Generation disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission. Generation, which managed managed $32.9 billion in assets as of March 31, declined to comment on the stock trades.
Generation bought 1.5 million more Alibaba American depositary receipts to end the first quarter with 3 million ADRs.
Alibaba ADRs dropped 2.6% in the first quarter, and so far in the second, they are down 5.6%. For comparison, the S&P 500 index rose 5.8% in the first quarter, and is up 5.8% again so far in the second.
We don’t think Alibaba ADRs are exactly a bargain yet, and there could be “more pain to come,” based on regulatory pressure and competition. Then again, it may not be time to sell the ADRs, either; Masayoshi Son, the head of SoftBank Group and a big Alibaba investor,told us earlier this month that Alibaba is “a great company, at a low price compared with its fundamentals.” Charlie Munger recently oversaw an investment in Alibaba ADRs.
Generation exited Airbnb completely in the first quarter, selling all 200,000 shares of the vacation-rental site it had owned at the end of 2020.
Airbnb stock soared 28.0% in the first quarter, but so far in the second, it has tumbled 25.3%.
Airbnb’s first quarter,reported earlier this month, was better than expected, as vaccines and fewer restrictions led to more traveling. Wall Street, however, trimmed target prices on Airbnb stock to reflect a more-cautious view on growth stocks. Airbnb CEO and co-founder Brian Chesky plans a “systematic update on pricing” later this year to combat sticker shock in some areas.
Schwab stock soared 22.9% in the first quarter, and so far in the second it is up 13.3%.
We noted in April that an environment of rising rates and increased trading volume would be favorable for the brokerage stock. Schwab’s strong results this year show that it hasn’t quite been dislodged by upstart trading apps such as Robinhood. A court sided with Schwab’s TD Ameritrade unit earlier this year in a case that involved the handling of investors’ orders.
Generation sold 10.3 million Schwab shares to end the first quarter with 17.7 million shares.
The investment firm sold 874,296 Texas Instruments shares to cut its investment to 2.3 million shares.
Texas Instruments stock rose 15.1% in the first quarter, and it has been about flat so far in the second.
Texas Instruments seemed to give mixed signals about the chip shortage in April when it reported first-quarter earnings. Texas Instruments stock is a top pick for one analyst.