"Tracking Seth Klarman’s Baupost Group Holdings – Q2 2020 Update"
"Seth Klarman’s 13F portfolio value increased from $6.77B to $8.01B this quarter.Baupost Group increased Atara Biotherapeutics while dropping Cheniere Energy.The portfolio continues to be heavily concentrated with the top three positions accounting for ~49% of the 13F portfolio.This article is part of a series that provide 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 08/13/2020. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund's moves during Q1 2020.Baupost Group’s 13F portfolio value increased ~18% from $6.77B to $8.01B this quarter. The total number of 13F securities decreased from 30 to 29. The portfolio is heavily concentrated with eBay Inc., Liberty Global, Fox Corp, ViaSat, and ViacomCBS together accounting for ~61% 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.New Stakes:HCA Healthcare (HCA): HCA is a small 1.21% of the portfolio established this quarter at prices between $82 and $118 and the stock currently trades at ~$134.Verint Systems (VRNT), Ventas Inc. (VTR), and SS&C Technologies (SSNC): These are minutely small (less than ~0.5% of the portfolio each) positions purchased during the quarter.Stake Disposals:Cheniere Energy (LNG): LNG was a ~4% of the portfolio position as of last quarter. The original large stake was established in Q1 2014 at prices between $41 and $55. In H2 2014, it was doubled at prices between $62 and $84. The three quarters thru Q1 2016 saw another stake doubling at prices between $24 and $71. Q4 2016 saw a reversal: 22% sold at prices between $35.50 and $43.50 and that was followed with a roughly one-third reduction in Q2 2018 at prices between $53 and $69. The three quarters thru Q3 2019 had also seen a ~30% selling at prices between $58 and $70. There was another ~20% reduction last quarter at prices between $30 and $66. The disposal this quarter was at prices between $32 and $51. The stock currently trades at $54.25.Cars.com (CARS): CARS is a June 2017 spinoff from Tegna (TGNA). Shares started trading at ~$25 and currently goes for $8.64. The minutely small 0.19% stake was disposed this quarter at prices between $3.61 and $8.22.Energy Transfer LP (ET), XPO Logistics (XPO), and Spirit AeroSystems (SPR): These very small (less than ~1% of the portfolio each) stakes established last quarter were eliminated this quarter.Stake Increases:Liberty Global (LBTYK) (TBTYA): LBTYK is currently the second-largest position at ~17% 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 and that was followed with a ~12% stake increase next quarter. The stock currently trades near the low end of those ranges at $21.54. Last quarter also saw a ~16% stake increase while this quarter there was a marginal further increase. For investors attempting to follow, LBTYK is a good option to consider for further research.Qorvo Inc. (QRVO): QRVO is a 4.23% 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. The stock is now at ~$132. Last year had seen a ~75% selling at prices between $60 and $118. There was a ~11% stake increase last quarter and a marginal increase this quarter.Translate Bio (TBIO): The ~4% TBIO stake saw a ~35% stake increase in Q2 2019 at prices between $8.75 and $13.25 and that was followed with a stake doubling next quarter at prices between $8 and $12. There was a minor ~3% stake increase this quarter at ~$22 per share. The stock is now at $14.59.Note: TBIO had an IPO in June 2018. Its main asset is a compound to treat Cystic fibrosis (mRNA therapy) acquired from Shire plc. Klarman controls ~28% of the business.HD Supply Holdings (HDS): HDS is a ~3% of the portfolio position purchased last quarter at prices between ~$23 and ~$43 and the stock currently trades at $41.92. There was a ~7% stake increase this quarter.Atara Biotherapeutics (ATRA): ATRA is a 1.80% of the portfolio stake established in Q4 2014 at around $19 per share. The original position was almost doubled next quarter at prices between $18 and $42.90. Recent activity follows: there was a ~17% stake increase in Q1 2018 at prices between $18 and $48. Q3 2019 also saw a ~20% stake increase at prices between $12 and $20. This quarter saw a similar increase at prices between $7.50 and $14.93. The stock currently trades at $12.17. For investors attempting to follow, ATRA is a good option to consider for further research.Note: Klarman controls ~18% of the business.Stake Decreases:ViacomCBS (VIAC) previously CBS Corporation: VIAC is a fairly large (top five) 5.48% position purchased in Q4 2018 at prices between $42 and $58.50 and increased by 235% next quarter at prices between $43.50 and $52. The following three quarters had also seen a stake doubling at prices between $35.50 and $53.50. Last quarter saw another one-third increase at prices between $11.25 and $42. The stock currently trades at $27.46. There was a ~16% selling this quarter at prices between $12.43 and $28.51.HP Inc. (HPQ): HPQ is a 3.92% of the portfolio stake established in Q4 2019 at prices between $16 and $20.75 and doubled last quarter at prices between ~$13 and ~$23. The stock currently trades at $18.18. There was a ~30% reduction this quarter at prices between $14 and $18.Alphabet Inc. (GOOG) (GOOGL) and Facebook Inc. (FB): These two positions were established last quarter. The 3.79% GOOG stake was purchased at prices between $1057 and $1527 and the stock currently trades at ~$1505. This quarter saw a ~30% selling at prices between $1093 and $1465. FB is a 2.41% of the portfolio position established at prices between $146 and $223 and it is now at $261. This quarter saw a ~57% selling at prices between $154 and $242.Akebia Therapeutics (AKBA): The 2.54% AKBA stake came about as a result of the all-stock merger with Keryx Pharmaceuticals. Baupost had effective ownership of 65.37M shares (includes 39.6M shares of convertible notes they agreed to redeem at a conversion price of $4.17) for which they received 24.47M shares of AKBA (0.37433:1 ratio). Overall, their cost-basis is around $19, much higher than the current price of $10.53. Last three quarters have seen a ~40% selling at prices between $3.15 and $13.60.Note: Baupost controls ~12% of Akebia Therapeutics.Colony Capital (CLNY): The 0.77% stake in Colony Capital 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 this quarter at prices between $1.42 and $3.10. They control ~5% of CLNY and their overall cost-basis is ~$12.50 per share. CLNY currently trades at $2.69.AmerisourceBergen (ABC): ABC was a minutely small position established in Q3 2017. It was built to a significant stake next quarter at prices between $73 and $94. The two quarters thru Q3 2018 had seen a stake doubling at prices between $79 and $95 while next quarter saw a ~25% selling at prices between $71 and $94. There was a ~20% stake increase in Q1 2019 at prices between $73 and $87. Last four quarters have seen a ~80% selling at prices between ~$74 and ~$102. The stake is now at 0.59% of the portfolio and the stock is at ~$104.PG&E Corporation (PCG): PCG is a 0.52% stake established in Q1 2018 at prices between $38 and $45 and increased by ~43% next quarter at prices between $39 and $47. Q3 2018 saw a stake doubling at prices between $41.50 and $47. Q2 2019 saw another 58% stake increase at prices between $6 and $24. The stock currently trades at $9.41. There was a ~23% selling in Q4 2019 at prices between $3.75 and $12.50. That was followed with a ~50% reduction last quarter at prices between $7.25 and $18. This quarter also saw a similar reduction at prices between $7.90 and $12.60.Note: It was reported in November 2018 that Baupost had hedged this position by buying $1B worth of certain insurance claims against PG&E connected to the Nov 2017 wildfires for ~35c on the dollar.Univar Inc. (UNVR): UNVR is now a very small 0.27% stake. It was established in Q3 2018 at prices between $25.50 and $31 and increased by ~440% next quarter at prices between $16.25 and $31. The position was sold down by ~40% last quarter at prices between ~$7 and ~$24. This quarter saw another ~75% selling at prices between $9.60 and $18.15. The stock is now at $17.70.Vista Oil & Gas (VIST): VIST had an IPO in July 2019. Shares started trading at $9.25 and currently goes for $3.09. The position saw minor trimming this quarter.Note: Baupost controls ~9%  of Vista Oil & Gas.Liberty Media Sirius XM (LSXMK): The small LSXMK position established last quarter was almost sold out this quarter.Kept Steady:eBay Inc. (EBAY): EBAY is currently the largest 13F position at ~21% of the portfolio. It was established in Q4 2018 at prices between $26 and $33 and increased by ~40% in Q1 2019 at prices between $28 and $38. There was a ~18% selling next quarter at prices between $35.50 and $40. That was followed with a ~30% selling in Q3 2019 at prices between $38 and $42. Q4 2019 saw a ~20% stake increase at prices between $34.50 and $39.25. That was followed with a ~60% increase last quarter at prices between $26.34 and $38.50. The stock currently trades at $56.29.Fox Corp (FOX) (FOXA): The position came about as a result of the merger transaction between Walt Disney and Twenty First Century Fox. Klarman had a huge position in Twenty First Century Fox. The deal closed in March and the terms were ~$38 per share in cash or Disney stock subject to collar and one-third of one-share of new Fox for each share of Twenty First Century Fox. Klarman’s stake in Fox Corp is the third-largest in the portfolio at ~11%. The stock currently trades at $25.82.ViaSat (VSAT): VSAT is a large (top five) position at 6.58% of the portfolio. The stake has only seen minor increases since Q3 2012. Klarman first purchased VSAT in 2008 at much lower prices and his overall cost-basis is in the high-teens. The stock currently trades at $41.38. Q4 2016 saw a ~14% increase at prices between $66 and $81.Note: Regulatory filings since the quarter ended show them owning 16.29M shares (~24% of the business) of VSAT. This is compared to 13.73M shares in the 13F report. Last month, Baupost participated in ViaSat’s 4.47M share private placement by acquiring ~2.56M shares at ~$39 per share.McKesson Corp. (MCK): MCK is a 3.20% portfolio stake established in Q3 2017 at prices between $146 and $168 and increased by ~170% in the following quarter at prices between $135 and $163. The first three quarters of 2018 saw a ~60% stake increase at prices between $123 and $177. Q4 2018 saw a ~20% selling at prices between $108 and $137 while next quarter saw a two-thirds increase at prices between $110 and $136. The pattern reversed again in Q3 2019: ~50% reduction at prices between $134 and $149. That was followed with a ~20% stake increase next quarter at prices between $130 and $153. Last quarter also saw a ~5% further increase. The stock currently trades at ~$159.Note: MCK had a previous round-trip. It was a 1.75% portfolio stake established in Q4 2016 at prices between $124 and $167 and sold out in Q2 2017 at prices between $135 and $168.Theravance Biopharma (TBPH): TBPH is a 2.44% 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 last major activity was a ~25% increase in Q4 2016 at prices between $24.50 and $38.50. The stock is now at $16.70.Note: Klarman controls ~19% of the business. The 13F also lists a small position in Theravance Biopharma Notes.Nexstar Media Group (NXST): The 2.18% NXST position was established in Q4 2018 at prices between $71 and $88. Q2 & Q3 2019 saw a ~80% stake increase at prices between $90 and $120. The stock is now at ~$91.90. Last quarter saw a minor increase.Veritiv Corporation (VRTV): VRTV is a 0.75% 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 well below the low end of those ranges at $17.87.Note: Klarman’s ownership interest in VRTV is ~23%.Trilogy Metals (TMQ): The very small 0.30% of the portfolio TMQ stake was kept steady this quarter.Note: Baupost controls ~9% of Trilogy Metals.The spreadsheet below highlights changes to Klarman's 13F stock holdings in Q2 2020:Regulatory filings thru 5/14/2020:13D/A – 5/11 – TBIO – 17.54M shares – 27.9% of business, 13G – 4/9 – AKBA – 17.53M shares – 13.5% of business."