"Tracking Seth Klarman’s Baupost Group Holdings – Q1 2023 Update"
"Seth Klarman’s 13F portfolio value decreased from $6.13B to $5.85B this quarter.Baupost Group increased Alphabet and Fidelity National Information Services while dropping Meta Platforms, Micron Technology, and Amazon.com.The portfolio continues to be heavily concentrated with the top three positions accounting for ~40% of the 13F portfolio.This article is part of a series that provides an ongoing analysis of the changes made to Baupost Group's 13F stock portfolio on a quarterly basis. It is based on Klarman’s regulatory  filed on 5/12/2023. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund's moves during Q4 2022.Baupost Group’s 13F portfolio value decreased ~5% from $6.13B to $5.85B this quarter. The total number of 13F securities decreased from 34 to 31. The portfolio is heavily concentrated with Liberty Global, Liberty Media Sirius XM, Alphabet, ViaSat, and Qorvo together accounting for ~58% of the 13F holdings.Since inception (1982), Baupost Group’s 13F portfolio has accounted for between 2.4% to 15% of the Assets Under Management (AUM). The current allocation is at the high-end of that range. The rest of the AUM is diversified among cash, debt, real estate, and hedges. On average, the fund has held ~25% cash over the last decade. Seth Klarman’s distinct investment style is elaborated in his 1991 book “”. The book is out-of-print and copies sell for a huge premium.Note: They own ~32% of Garrett Motion (GTX) and ~9% each of Atara Biotherapeutics (ATRA) and Just Eat Takeaway (GRUB). GTX emerged from Chapter 11 bankruptcy in May 2021. The bulk of the ownership is through a series A preferred share offering.New Stakes:Skyworks Solutions (SWKS) and Jazz Pharmaceuticals (JAZZ): SWKS is a small 1.42% of the portfolio stake established this quarter at prices between ~$91 and ~$123 and the stock currently trades at ~$97. The 1.20% position in JAZZ stake was purchased at prices between ~$134 and ~$161 and it is now near the bottom of that range at ~$136.Stake Disposals:Meta Platforms (META): META was a 3.39% of the portfolio position established in Q1 2020 at prices between $146 and $223. The next two quarters saw a ~70% selling at prices between ~$154 and ~$304. There was a ~175% stake increase over the three quarters through Q3 2021 at prices between ~$245 and ~$355 while next quarter there was a ~36% reduction at prices between ~$307 and ~$348. That was followed with a ~30% selling in Q2 2022 at prices between ~$156 and ~$234. Last quarter saw the stake rebuilt at prices between ~$89 and ~$140. The elimination this quarter was at prices between ~$125 and ~$212. The stock is now at ~$234.Micron Technology (MU): MU was a 2.68% of the portfolio position purchased in Q3 2020 at prices between $42.50 and $52.65. Q2 2021 saw a one-third increase at prices between ~$77 and ~$96 while in Q4 2021 there was a ~55% selling at prices between ~$66 and ~$96. There was ~12% trimming in Q2 2022 while the next quarter saw a ~20% increase at prices between ~$49 and ~$65. The disposal this quarter was at prices between ~$50 and ~$64. The stock currently trades at ~$61.Amazon.com (AMZN): AMZN was a 1.36% of the portfolio purchased in Q2 20222 at prices between ~$102 and ~$168. There was ~60% selling next quarter at prices between ~$106 and ~$145. The position was rebuilt last quarter at prices between ~$86 and ~$121. The stake was sold this quarter at prices between ~$83 and ~$113. The stock currently trades at ~$110.Stake Increases:Liberty Media Sirius XM (LSXMK): The ~11% LSXMK stake was primarily built in Q3 2020 at prices between $32 and $37. Q4 2020 saw a ~14% stake increase. The four quarters through Q2 2022 saw the position doubled at prices between ~$35 and ~$56. The stock currently trades below the low end of their purchase price ranges at $27.80. The last three quarters have seen only minor adjustments.Alphabet Inc. (GOOG) (GOOGL): The large (top three) 10.41% GOOG stake was purchased in Q1 2020 at prices between ~$53 and ~$76. The last three quarters of 2020 had seen a ~75% selling at prices between ~$55 and ~$92. There was a ~265% stake increase in Q1 2021 at prices between ~$86 and ~$105. Q4 2021 saw a ~22% trimming at prices between ~$133 and ~$151 while next quarter there was a ~7% increase. The zig-zag trading pattern continued in the next quarter: ~30% reduction at prices between ~$106 and ~$144. That was followed with another ~60% selling during Q3 2022 at prices between ~$96 and ~$123. The stake was rebuilt last quarter at prices between ~$83.50 and ~$105. This quarter saw a ~47% stake increase at prices between ~$87 and ~$109. The stock is now at ~$118.Fidelity National Information Services (FIS): The 4.50% FIS position was purchased during Q3 2022 at prices between ~$76 and ~$105 and it is now at $55.07. There was a ~250% stake increase last quarter at prices between ~$57 and ~$85. That was followed with a ~125% increase this quarter at prices between ~$50 and ~$78.Gray Television (GTN): The very small 0.56% GTN stake saw a ~75% increase in Q2 2022 at prices between ~$17 and ~$22. That was followed with a ~45% increase next quarter at prices between ~$16.25 and ~$20.75. The stock currently trades at $7.60. The last two quarters have also seen minor increases.Stake Decreases:Qorvo Inc. (QRVO): QRVO is a large (top five) ~8% portfolio stake established in Q1 2017 at prices between $53 and $69 and increased by ~25% the following quarter at prices between $63 and $79. There was another ~22% stake increase in Q4 2017 at prices between $65 and $81. 2019 had seen a ~75% selling at prices between $60 and $118. Q4 2020 saw an about turn: ~50% stake increase at prices between ~$125 and ~$170. That was followed with a ~18% further increase next quarter. The two quarters through Q1 2022 saw another ~31% stake increase at prices between ~$119 and ~$178. The last two quarters saw a similar reduction at prices between ~$78 and ~$114. The stock is now at ~$90.Note: They have a ~4.6% ownership stake in the business.Warner Brothers Discovery (WBD): The large 6.52% of the portfolio stake in WBD was established in Q2 2022 at prices between ~$13 and ~$26. The next quarter saw a ~60% increase at prices between ~$11.30 and ~$17.50. The stock is now at $12.51. There was a minor ~7% stake increase last quarter while this quarter saw a ~19% trimming.New Oriental Education (EDU): EDU is a 3.58% of the portfolio position purchased in Q2 2022 at prices between ~$9.75 and ~$23.50. There was a ~25% selling last quarter at prices between ~$19 and ~$40. The stock is now at $37.77. This quarter also saw a minor ~7% trimming.Willis Towers Watson (WTW): WTW is a 3.41% of the portfolio stake established in Q1 2021 at prices between ~$200 and ~$235. The two quarters through Q3 2021 saw a ~60% selling at prices between ~$202 and ~$270 while the next quarter there was a ~25% stake increase at prices between ~$226 and ~$249. There was a similar reduction in Q2 2022 at prices between ~$191 and ~$243. Q3 2022 saw a ~40% increase at prices between ~$192 and ~$221 while this quarter there was a one-third reduction at prices between ~$220 and ~$257. The stock currently trades at ~$229.SS&C Technologies (SSNC): SSNC is a 3.16% position built in Q3 2020 at prices between ~$56 and ~$65. The two quarters through Q1 2021 had seen a ~25% stake increase at prices between ~$63 and ~$71. There was a ~22% selling in Q2 2022 at prices between ~$55 and ~$79. The next quarter saw a similar increase at prices between ~$48 and ~$63. It is now at ~$55. There was a ~13% trimming this quarter.Theravance Biopharma (TBPH): TBPH is a ~2% of the portfolio position established in Q2 2014 as a result of the spinoff of TBPH from Theravance (now Innoviva). The spinoff terms called for Theravance shareholders to receive 1 share of TBPH for every 3.5 shares of Theravance held. The two quarters through Q3 2021 saw a ~50% stake increase at prices between ~$7 and ~$22.50. The stock is now at $11.30. There was a ~15% trimming last quarter and that was followed with a ~9% trimming this quarter.Note: they have a ~15% ownership stake in the business.Fiserv Inc. (FISV): FISV is a ~1% of the portfolio position purchased in Q4 2021 at prices between ~$96 and ~$111. There was a ~30% stake increase in Q1 2022 at prices between ~$93 and ~$110 while in the next quarter there was a ~11% trimming. The last quarter saw a ~45% reduction at prices between ~$94 and ~$106. That was followed with a ~75% selling this quarter at prices between ~$99 and ~$118. The stock is now at ~$119.Herbalife Nutrition (HLF): HLF is a small 0.54% of the portfolio stake established last quarter at prices between ~$12.60 and ~$22.20 and the stock currently trades at ~$14. There was marginal trimming this quarter.Lithia Motors (LAD): LAD is a very small 0.25% of the portfolio stake established during Q3 2022 at prices between ~$215 and ~$296 and the stock currently trades at ~$212. The position was sold down by ~75% this quarter at prices between ~$201 and ~$294.DigitalBridge (DBRG) previously Colony Capital: The very small 0.25% stake in DigitalBridge came about as a result of the three-way merger of Colony Capital, Northstar Asset Management Group, and Northstar Realty Finance that closed in January 2017. Baupost held stakes in all three of these stocks and those got converted into CLNY shares. Roughly half the position was sold in Q2 2020 at prices between ~$5.70 and $12.40. Q1 2022 saw another ~20% selling at prices between ~$26.40 and ~$33. That was followed with another ~30% reduction next quarter at prices between ~$18 and ~$30. Their overall cost-basis is ~$50 per share. DBRG currently trades at $10.93. This quarter saw a ~60% selling at prices between ~$10.50 and ~$15.40.Note: the prices quoted above are adjusted for the one-for-four reverse stock split last August.Kept Steady:Liberty Global (LBTYK) (TBTYA): LBTYK is currently the largest position at ~19% of the portfolio. It was established in Q3 2018 at prices between $25 and $28.50 and increased by ~120% next quarter at prices between $19.50 and $27.50. There was another ~27% stake increase in Q1 2019 at prices between $19.80 and $25.80. Since then, the activity had been minor. There was a ~10% reduction in Q2 2022 at prices between ~$22 and ~$26. The stock currently trades at ~$18.ViaSat (VSAT): VSAT is a large (top five) position at 9.43% of the portfolio. Klarman first purchased VSAT in 2008 at much lower prices and his overall cost-basis is in the high-teens. In July 2020, Baupost participated in ViaSat’s 4.47M share private placement by acquiring ~2.56M shares at ~$39 per share. The stock currently trades at $35.75.Note: Baupost controls ~22% of the business.Veritiv Corporation (VRTV): VRTV is a 7.68% of the 13F portfolio position established in Q3 2014 at prices between $32.50 and $50.50. Q4 2017 saw a ~20% stake increase at prices between $22.50 and $32.50. The stock currently trades at ~$110.Note: Klarman’s ownership interest in VRTV is ~26%.The spreadsheet below highlights changes to Klarman's 13F stock holdings in Q1 2023:Source: John Vincent. Data constructed from Baupost Group’s 13F filings for Q42022 and Q1 2023.Regulatory filings from 11/18/2022 to 2/18/2023: 13G/As – 2/14 – LFG – zero, LSXMK – 7.68M shares – 7.83% of business. 13G/As – 2/13 – VRTV – 3.32M shares – 24.66% of business, QRVO – 5.73M shares – 5.65% of business, LSXMA – 13.65M shares – 6.25% of business, LSXMB – zero, VRNT - zero, AVAN – zero, JETKY – 19.51M shares – 9.03% of business, TBPH – 11.42M shares – 16.95% of business, AGCB - zero, OB – 9.59M shares – 15.47% of business. 13G/A – 2/9 – TMQ  - 5.74M shares – 3.93% of business, 13G/A – 1/9 – 7.99M shares – 5.46% of business."