13F: Elliott Management sells down SoftBank Group stake, Druckenmiller dumps Amazon stock

Yahoo Finance anchors discuss what stocks major investors are buying and selling.

Video transcript

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AKIKO FUJITA: Well, another blow to the world's largest tech investment group. Hedge fund Elliott Management pulled out of its almost-- of almost all of its positions in SoftBank Group. So this just a week after SoftBank group reported a record quarterly loss of $23 billion. Shares of SoftBank are now down 45% since its peak in March of 2021.

And you know, Brian, it has been a rough ride for Masa Son when you think about where his investments have gone. I mean, this is sort of the risk that he took, right? Which is betting big on a lot of these startups, cashing in on the IPO, and those companies, largely not profitable, simply haven't done well for him.

I mean, we did get a bit more of color from him when SoftBank reported earnings last week, but a loss in conviction is kind of what it--

BRIAN CHEUNG: He was a bad boy. Yeah.

AKIKO FUJITA: --comes down to, I guess. Just yet another investor who's saying, this fund is not going in the direction that it should be.

BRIAN CHEUNG: And you can't blame the macro environment or COVID because a lot of the narrative around SoftBank effectively began with the WeWork spill, right? With their failed IPO prior to the pandemic. So I think that when we talk about what's happening with the SoftBank Group, obviously when it comes to big financiers around the world, headline risks are certainly a part of the narrative. And when you see a lot of money coming out of SoftBank, you imagine a lot of that has to do singularly with just how much attention that massive bet on WeWork specifically was.

But at the same time, we have to acknowledge SoftBank is a massive conglomerate. They still have a lot of money, and you know, you see other headlines, like, they just put $110 million together with Sequoia Capital to finance a Chinese e-commerce SAS company. They have money, and you wonder if they're going to shift maybe to different regions of the world. I don't know.

AKIKO FUJITA: I mean, but they have been, right? I mean, he's gotten investments not just in the US and India--

BRIAN CHEUNG: Everywhere. Yeah.

AKIKO FUJITA: --and Southeast Asia. I don't think anybody expects Son to back down because of this, but I think there is some reflection that's happening as a result of the significant losses. I mean, worth pointing out again, $23 billion.

In his most recent earnings he said, you know, I'm ashamed of myself for being so elated by big profits in the past. Do you remember when they went last year, when they had the big IPOs coming in and he sort of had-- you know, his presentations are always quite colorful.

BRIAN CHEUNG: Yeah.

AKIKO FUJITA: But I think this is to me, sort of a good description of how-- or where SoftBank is right now. In that presentation, he put up a portrait of a 17th century shogun in Japan who suffered huge losses in a battle and then was ordered not to lose face, and basically said, this is the state of the company right now.

BRIAN CHEUNG: You know, the problem with those types of stories is that we never hear how those legends actually ended because oftentimes it ends very poorly for those characters, even though they have, like, a hero arc that happens. But look, at the end of the day, I think that we have to remember that Masa Son is also approaching a 2022 and a 2023 that's essentially a minefield when it comes to where to put your money if we're talking specifically about emerging, high growth, early stage companies, right?

We've had a lot of conversations with the VCs on this show who have said, look, there are still investable opportunities out there, but finding the good ones, finding the moonshots, the bar is a lot higher for putting the investment in there because of the fact that you're in a rising rate environment and we might enter a global recession, right?

AKIKO FUJITA: Well, true, but the argument with SoftBank is that they weren't getting it on early stage. They were getting it on later stage and then inflating the valuations of these companies.

BRIAN CHEUNG: Yeah, so whether or not that story changes for them, we'll see, but keeping on the theme of 13F season. That's where we're getting a lot of these filings. Massive hedge funds disclosing big moves, and billionaire Stan Druckenmiller, breaking with his former mentor, and well, also billionaire George Soros. Druck dumping his family office's entire $199 million position in Amazon in the second quarter, but Soros taking on a bigger stake in Amazon.

And I think, Akiko, this is very thematic to what we talked about at the beginning of this show, where you have smart money all over the place right now. And some of that could be because of this inflection point that we find ourselves in, where people are trying to figure out where is the bottom. And I think that different billionaires and different investors will have different views on that, and that really determines your allocation strategy for these massive large cap stocks that are essentially the entire market, right? I mean, Amazon is essentially with its capsize.

AKIKO FUJITA: Yeah. Well, do we know when he actually exited his positions at Amazon? I mean, you have to wonder, is this actually a good time out?

BRIAN CHEUNG: Well, and that's a good point that you bring up, right? So every 13F filing seasons, we only get these quarterly, right? Comes every three months. So in theory, the timing of it could have been in a pretty wide range, but broadly speaking, you would imagine that because most of the rebound that we saw was in middle of June let's call it, you can probably reliably expect that a lot of this repositioning was happening some time after that. So we'll just have to get Stan or George Soros on the show. We'll see.

AKIKO FUJITA: Open invite.

BRIAN CHEUNG: Open invite.