Prominent hedge funds invested in Twitter before Musk unveiled plans

The Twitter logo and trading information are displayed while a trader works on the floor of the New York Stock Exchange (NYSE) in New York City, US, May 3, 2022. REUTERS/Brendan McDermid

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BOSTON, May 17 (Reuters) – Leading hedge funds, including Point72 Asset Management and Bridgewater Associates, invested in Twitter (TWTR.N) in the first quarter, putting them on track to make big gains early in the second quarter when billionaire Elon Musk revealed plans to buy the company.

Point72, run by Steven A. Cohen, bought 1.5 million shares of common stock worth $58.8 million, while Balyasny Capital Management bought about the same amount, according to the filings and data collected by Symmetric.io. Holocene Advisors bought $56 million worth of shares and Bridgewater Associates, founded by Ray Dalio, took a $8.3 million stake.

Hedge funds DE Shaw & Company and Bandera Partners also bought millions of dollars worth of shares, expanding the positions they already held.

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The so-called 13F filings show what investors owned as of March 31. In early April, Musk made an application that revealed him as a new shareholder — a development that pushed stocks up and down as he revealed plans for the company.

News that Musk, chief executive officer of electric car maker Tesla Inc (TSLA.O), owned 9.2% of the social media platform, sent Twitter shares up more than 30% in early April, providing a ray of hope amid the defeat of the technology sector. By the time the company announced in late April that Musk would be taking Twitter private, its shares were climbing higher.

Data from Symmetric.io shows that 20 fund firms increased their stakes on Twitter and made 11 new investments in the first three months of the year. Although the registrations submitted look backwards, investment trends are widely looked at. If shareholders who held positions in late March stayed with Twitter in early April, they likely saw big gains.

But there were also prominent investors who went the other way, shortening or liquidating positions after the stock price fell over months.

They lost confidence in Twitter during the first quarter after the stock price lost about 36% of its value between October and the end of January.

Symmetric.io’s filings and data show that 32 companies have lowered their holdings and 37 have left.

Southpoint Capital Advisors got out and sold $138 million worth of shares, while Millennium Management and Citadel each cut their stakes, the filings show.

Representatives of the funds declined to comment or did not respond to requests for comment.

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Reporting by Svea Herbst-Bayliss; Editing by Bernard Orr

Our Standards: The Thomson Reuters Trust Principles.

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