Big investors snatch up Verizon and dump GM

Billionaires also decided to cut stakes in DirecTV and P&G and buy shares of BlackBerry, Facebook and Expedia.

By MSN Money Partner May 16, 2014 12:06PM
Customers enter a Verizon Wireless store in New York City on July 23, 2010 (© Jin Lee/Bloomberg via Getty Images)By Anupreeta Das and Juliet Chung, The Wall Street Journal

Billionaire investors Warren Buffett, Daniel Loeb and John Paulson made a connection on Verizon Communications (VZ) as their firms separately picked up stakes in the telecommunications firm amid a wave of deal-making in the sector.


Mr. Buffett's Berkshire Hathaway (BRK.A) also trimmed its holdings in General Motors (GM) in the first quarter, securities filings show. Meanwhile, hedge-fund manager David Einhorn dumped all his shares in the embattled car maker.


The disclosures were among many big positions revealed on the quarterly date when investors who manage more than $100 million must disclose their securities holdings to the Securities and Exchange Commission.


Berkshire Hathaway had a Verizon stake valued at about $524 million as of the end of March. Given the stake's size, which represents less than 1 percent of Verizon's shares, it is likely to be a purchase made by one of Mr. Buffett's two investment managers.


The Omaha, Neb.-based investor has previously said he typically picks the big, multibillion-dollar positions for Berkshire, while his managers, Ted Weschler and Todd Combs, buy smaller stakes.


During the quarter, Berkshire reduced its stake in satellite television company DirecTV (DTV) another investment of the duo, by two million shares. Berkshire still owns 34.5 million shares of DirecTV, which were valued at $2.6 billion at the end of the first quarter.


The Wall Street Journal has reported that AT&T (T) is in talks to buy DirecTV for about $50 billion. At that price, Berkshire stands to make a sizable profit on its holding of the stock.


Mr. Paulson's new Verizon stake was worth $415.9 million at the end of the quarter, filings show.


Mr. Loeb's reported stake in Verizon was smaller, at $166 million, but his firm, Third Point LLC, also bought shares in two cable companies. It increased its stake in Liberty Global (LBTYA) and picked up a small new position in Time Warner Cable (TWC) worth about $52 million. Comcast (CMCSA) in February said it plans to buy Time Warner Cable for $45 billion.


Berkshire cut its position in General Motors (GM) by 10 million shares, and now owns 30 million shares valued at about $1 billion. The largest U.S. auto maker has recalled nearly 12.8 million cars world-wide this year. That includes recalls to repair cars equipped with a defective ignition switch that it acknowledged having investigated for years without taking action.


Mr. Einhorn's Greenlight Capital got out of GM entirely in the first quarter, selling all 17 million of its shares.


In the firm's first-quarter letter to clients, when Greenlight earlier revealed its exit, Greenlight wrote, "We expected 2014 to be an earnings break out, and exited early this year when earnings guidance revealed it would not be."


Among other new stakes revealed on Thursday, Steven A. Cohen's firm picked up 11.2 million shares of BlackBerry (BBRY), which has seen its share of the global smartphone market tumble in recent years.


Mr. Cohen's firm, now called Point72 Asset Management, was formerly known as SAC Capital Advisors LP. It changed its name in the wake of the firm pleading guilty to insider trading and now primarily manages Mr. Cohen's personal wealth.


Another big purchase was from David Tepper's Appaloosa Management LP, which reported it held 478,500 shares of Facebook (FB) at the end of the first quarter.


Appaloosa also added a stake to online travel company Expedia (EXPE), purchasing 695,837 shares during the quarter, worth $50.5 million at the quarter's end.


The positions were particularly notable in light of Mr. Tepper's gloomy comments Wednesday at the annual hedge-fund-focused SALT conference in Las Vegas. "The market is kind of dangerous right now . . . don't be too fricking long right now," he said, referring to bullish positions. "There's times to make money and there's times not to lose money."


William Ackman's Pershing Square Capital Management LP got out of its positions in consumer products giant Procter & Gamble (PG) and mall operator General Growth Properties (GGP), filings showed.


At a February dinner, Mr. Ackman told investors he had sold the remainder of the General Growth stake and that it was Pershing Square's most profitable investment ever, gaining 256 percent over the life of the investment.


More from The Wall Street Journal


8Comments
May 16, 2014 1:54PM
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GM shareholders wiped out, union and uncle Sam held the rest of the new shares after the "restructuring".  Can you say communism?  No capital holders, Union --- ie labor owns the means of production.  No wonder Obamamarx loves the deal.
May 16, 2014 2:53PM
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GM still needs to cut more brands and models so it can stop marginalizing and decontenting its best products. The only way to win back market share and shareholder value is to blow away the competition in specific categories with price, quality,durability and safety. That means lower margins for around a decade (which WS/Hedge Funds will hate) but growth and prosperity for a long term future.

 

Honda,Toyota,Nissan did this in the early 80's, Hyundai is following this formula now.

 

May 16, 2014 12:29PM
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But; but think of all the big money they are losing out on shouldn't they be holding LOL.

 

What better investment could you have than Obama Motors?

May 16, 2014 2:49PM
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Holy Christ, Facts; Seems you aren't much of a GM supporter or maker of American cars..

Where a lot of the money stays here employing thousands of people(use to be millions)for the Big 3.

Plus a lot of those profits don't go back to the "Homeland or Motherland.."


Tell us how you really feel.....And are you an American...??

ps..I didn't give you a thumbs down, I think that's just stupid and juvenile...!!

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