Hedge funds are dumping Facebook and Google

By Brandon Kochkodin, Hema Parmar and Katia Porzecanski

Billionaire David Tepper’s Appaloosa Management more than tripled its stake in Apple Inc. and almost doubled its holding of Facebook Inc. in the final three months of last year.

Appaloosa reported shares in Apple worth $777 million as of Dec. 31, which represented 7.4 percent of the hedge fund firm’s U.S. stock holdings, according to a regulatory filing Wednesday. Tepper added to his stake in Facebook, his second-biggest position, by more than 2 million shares. That position was valued at $976 million at the end of the fourth quarter.

The FAANG stocks have posted mixed performance this year. Apple is down about 1 percent, while Amazon.com Inc. and Netflix Inc. have soared.

Other big names also expect that the two tech darlings have more room to run. Louis Bacon’s Moore Capital Management added 900,000 shares of Apple, boosting its holding to about $200 million, according to filings. Chase Coleman’s Tiger Global Management pumped up its position in Facebook.

Stephen Mandel’s Lone Pine Capital added a $900 million wager on Amazon snapping up 770,000 shares in the fourth quarter of 2017. The online retailer accounts for nearly 5 percent of the hedge fund’s U.S. stock holdings. The hedge fund firm also started a $625 million stake in Alphabet, buying up about 598,000 shares in the fourth quarter. Meanwhile, it reduced its Facebook position, selling about 632,000 shares of the company.

Some prominent hedge funds retreated from the FAANGs in the fourth quarter.

Philippe Laffont’s Coatue Management, which rode the FAANG wave last year, sold 2.84 million shares of Apple, bringing the value of its holding to $730 million as of Dec. 31. In September, Laffont called the new iPhone X “groundbreaking” but its sales have since disappointed. The firm also reduced its Facebook position by 1.71 million shares, according to regulatory filings Wednesday.

Tiger Global dumped 1.3 million shares of Netflix, leaving it with a stake worth $337 million, and trimmed its Amazon position. Maverick Capital, run by Lee Ainslie, reduced its Facebook and Alphabet Inc. stakes.