Jim Simons' RenTech fund virtually eliminated its $500 million Tesla stake last quarter - and slashed its Twitter bet by 90%

Jim Simons.

The Abel Prize/YouTube

• Renaissance Technologies eviscerated its Tesla and Twitter stakes last quarter.
• RenTech sold almost all of its shares in Elon Musk's automaker, cutting its stake to below $400,000.
• Jim Simons' quant fund also slashed the value of its Twitter bet from around $94 million to below $11 million.

Renaissance Technologies sold virtually all of its Tesla shares last quarter, and slashed its Twitter stake by 90%, a Securities and Exchange Commission filing revealed this week.

The quantitative fund pared its Tesla position from a split-adjusted 2.2 million shares valued at $504 million at the end of June, to only 1,400 shares worth less than $400,000 at the end of September.

Moreover, it cut its Twitter stake from 2.5 million shares worth $94 million at the midpoint of this year, to 248,000 shares valued around $11 million on September 30.

RenTech, one of the biggest and best-performing hedge funds in history, was founded by Jim Simons, a former NSA codebreaker and MIT math professor. It relies on algorithms to determine many of its trades, resulting in sweeping changes to its stock portfolio every quarter.

Simons' fund commanded a $1.7 billion stake in Tesla as recently as March 30, making Elon Musk's electric-vehicle company its number-two holding at the time. However, it halved the position in the second quarter of this year, and has now pared it to almost nothing as of September 30.

Moreover, RenTech counted Twitter in the top 300 of its roughly 4,200 holdings at the end of June. Following its latest disposals, the social-media company no longer ranks in its top 900 positions. Musk took Twitter private in late October, after attempting to back out of the purchase over the summer.

RenTech made striking changes to three of its top five holdings last quarter. It slashed its stakes in Apple and Facebook-owner Meta by roughly 80%, and more than halved its Chevron position. On the other hand, it boosted its Airbnb bet by 30% to 7.3 million shares, meaning the home-rental platform jumped from its 17th-largest holding to number four on the list.

The disposals, coupled with declines in the market value of some holdings, meant RenTech's US stock portfolio slid in value by 16% or nearly $14 billion, to under $71 billion.

It's worth underscoring that quarterly portfolio updates only provide a snapshot of a fund's holdings on a specific date. They also exclude shares sold short, and stakes in private businesses and overseas-listed companies.

Moreover, when opaque algorithms are dictating trades, it's even tougher to discern the reasoning behind certain moves. Yet RenTech's decision to dump almost all of its Tesla and Twitter shares suggests it saw little short-term upside for Musk's electric-vehicle company, and wasn't willing to bet on the billionaire completing the purchase of his favorite microblogging platform.

Read more: The 'total return era' of investing might be over, the credit chief for a $6 billion firm told us. Here's what he's buying to lock in solid returns that will hold up in a recession.

Read the original article on Business Insider

from Business Insider https://ift.tt/W1FCDIA
via IFTTT