Dan Loeb has a reputation as an investor who is a leader and shaker. In 1995, he founded New York’s Third Point hedge fund. Third Point now manages approximately $11.5 billion of assets. Loeb has a net worth of $3.3 billion according to Forbes.
Loeb made some changes to his hedge fund portfolio during the 4th quarter of 2023. Loeb decreased his stakes during Amazon (NASDAQ: AMZN) You can also find out more about the following: Microsoft (NASDAQ: MSFT). The billionaire bought another”Magnificent Seven” stock.
Profits are taken
Loeb has sold 210.000 shares of Microsoft during Q4. Third Point still holds a large stake in Microsoft, but it has been reduced by more than 9.4%. Microsoft is the fund’s second largest holding.
Since 2006, the billionaire has held Microsoft in various forms. The billionaire investor initiated his most recent position during the fourth quarter 2022. Just in time for the Generate AI OpenAI launched ChatGPT, which started a wave. Microsoft’s partnership with OpenAI was one of the major beneficiaries of this wave.
Third Point acquired Amazon’s stock in the fourth quarter of 2019 after first purchasing it late that year. Loeb did not stay away from the leader in e-commerce, cloud computing and other services for long. In the second quarter 2023, he initiated a position in Amazon. Amazon is still the third largest holding of the hedge fund, despite the fact that he has reduced Third Point’s stock stake by almost 10.3% during Q4 2023.
Why did Loeb reduce his stakes in Amazon and Microsoft? Most likely, he was looking to reap some profit. The two stocks both delivered significant gains in the past year.
Meta
Loeb’s bets on Magnificent 7 stocks were cooled a bit, but he still placed more money on Meta Platforms (NASDAQ: META). In Q4 of 2023, the hedge fund manager increased Third Point’s holding in Meta by almost 5.5%. Meta was Third Point’s sixth largest holding at the end 2023, valued at $410 million.
Loeb began his relationship with Meta in the second quarter 2016 when he bought its stock. Loeb held shares in the social media firm for just over two years, before selling them. In the second quarter 2020, Loeb bought Meta again and held a position until 2021 Q4. Loeb returned to Meta in the third-quarter of 2023, with a new investment.
Meta, like Amazon and Microsoft enjoyed an AI tailwind in 2018. Loeb may not have been motivated by this factor to increase his stock holdings. My hunch says that Loeb was pleased with Meta’s efforts to improve its profitability.
These efforts pay off. In 2023’s Q4, Meta’s profits more than tripled. Full-year profits jumped 69%.
Loeb, did you make the right move?
Loeb has, in a sense, made three Magnificent Seven deals. Loeb’s decision to raise Third Point’s Meta stake is paying off. Meta’s stock price has soared over 45% in the last year. Amazon and Microsoft have also seen double-digit increases year-to date. Loeb would have earned more by owning shares of both companies.
Loeb could have made the right decision by reducing his positions in Amazon or Microsoft. Third Point has significant holdings in both stocks. Investors want to make sure their portfolio isn’t too concentrated.
Loeb, and any other investor will benefit from owning these three stocks over the long-term. Amazon and Microsoft should see their cloud businesses continue to thrive, thanks to AI. Meta’s emphasis on smart glasses and business messaging with AI embedded is appealing. Amazon, Microsoft and Meta are going to be magnificent for many years.
Why should you invest in Meta Platforms now?
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John Mackey is a former CEO at Whole Foods Market (an Amazon subsidiary) and he’s a board member for The Motley Fool. Randi Zuckerberg is The Motley Fool’s Board of Directors. She was formerly the director of marketing and spokesperson for Facebook, and her sister, Meta Platforms CEO Mark Zuckerberg. Keith Speights The Motley Fool has Amazon, Meta Platforms and Microsoft positions. The Motley Fool recommends and has Amazon, Meta Platforms and Microsoft in its portfolio. The Motley Fool suggests the following: short January 2026 $400 calls and long January 2026 395 calls. The Motley Fool is recommending a Disclosure policy.
Billionaire Dan Loeb sold Amazon and Microsoft, but bought this “Magnificent 7” stock The Motley Fool originally published this article