"Tracking Seth Klarman’s Baupost Group Holdings – Q4 2020 Update"
"Seth Klarman’s 13F portfolio value increased from $9.25B to $10.84B this quarter.Baupost Group added Intel, Marathon Petroleum, and a slew of SPACs during the quarter.The portfolio continues to be heavily concentrated with the top three positions accounting for ~36% 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 02/12/2021. Please visit our  article for an idea on how his holdings have progressed over the years and our  for the fund's moves during Q3 2020.Baupost Group’s 13F portfolio value increased ~17% from $9.25B to $10.84B this quarter. The total number of 13F securities increased from 34 to 41. The portfolio is heavily concentrated with eBay Inc., Liberty Global, Intel, Fox Corp, and Qorvo together accounting for ~51% 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:Intel Corp (INTC): INTC is a large (top three) 8.36% of the portfolio stake established this quarter at prices between ~$44 and ~$55 and the stock currently trades well above that range at $61.81.Marathon Petroleum (MPC): MPC is a ~3% of the portfolio position purchased this quarter at prices between ~$27.50 and ~$44 and it is now at $50.46.RedBall Acquisition (RBAC) & wts and Vesper Healthcare Acquisition (VSPR) & wts: These two SPACs had IPOs last quarter. RBAC units are currently trading at $11.42, a premium to the ~$10 redemption cash value. Vesper Healthcare is merging with Hydrafacial in a ~$1.1B EV deal announced in December. The units currently trade at $12.30 compared to redemption cash-value of ~$10.Note: Baupost owns 8.61% each of RedBall Acquisition and Vesper Healthcare Acquisition.Advantage Solutions (ADV), Fidelity National Financial (FNF), Ajax I (AJAX) units, Avanti Acquisition (AVAN) units, Horizon Acquisition II (HZON) units, InvestIndustrial Acquisition (IIAC) units, Radius Global Infrastructure (RADI), and Dragoneer Growth Opportunity (DGNR): These are small (less than ~1.5% of the portfolio each) new stakes established during the quarter.Note 1: Baupost owns 6.67% each of Avanti Acquisition & Horizon Acquisition II, 6.21% of Ajax I, and 5.22% of InvestIndustrial Acquisition. All four trade at sizable premiums to the $10 cash redemption value.Note 2: Ajax I, Avanti Acquisition, Horizon Acquisition II, and InvestIndustrial Acquisition are SPACs that had IPOs during the quarter. Dragoneer Growth Opportunity is also a SPAC which had an IPO last August. It is interesting that Baupost bought this stake in the secondary market at a premium to the redemption cash value.Stake Disposals:Applied Materials (AMAT) and Howmet Aerospace (HWM): The 1.48% AMAT stake was established last quarter at prices between ~$55 and ~$68 and disposed this quarter at prices between ~$57 and ~$90. It is now at ~$117. The small 0.83% HWM stake was established last quarter at prices between $14.75 and $18.80 and eliminated this quarter at prices between $16.50 and $28.50. It currently trades at $28.28.HD Supply Holdings (HDS): HDS was a ~3% of the portfolio position purchased in Q1 2020 at prices between ~$23 and ~$43. Home Depot (HD) acquired HD Supply Holdings for $56 per share cash and the transaction closed in December.HP Inc. (HPQ): HPQ was a 2.73% of the portfolio stake established in Q4 2019 at prices between $16 and $20.75 and doubled next quarter at prices between ~$13 and ~$23. Last two quarters saw a one-third selling at prices between ~$14 and ~$20. The elimination this quarter was at prices between ~$17.50 and ~$25. The stock currently trades at $27.49.McKesson Corp. (MCK): MCK was a 2.69% portfolio stake built during the five quarters thru Q3 2018 at prices between $123 and $177. Q1 2019 also saw a two-thirds increase at prices between $110 and $136. The pattern reversed 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. The stake was disposed this quarter at prices between ~$144 and ~$184. The stock currently trades at ~$182.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.Stake Increases:eBay Inc. (EBAY): EBAY is currently the largest 13F position at ~14% 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 in Q1 2020 at prices between $26.34 and $38.50. The stock currently trades at ~$63. Last quarter saw a ~6% trimming while this quarter there was a minor increase.Qorvo Inc. (QRVO): QRVO is a large (top five) 6.81% 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. This quarter saw an about turn: ~50% stake increase at prices between ~$125 and ~$170. The stock is now at ~$176.Liberty Media Sirius XM (LSXMK): The ~4% LSXMK stake was primarily built last quarter at prices between $32 and $37 and the stock currently trades at ~$43. This quarter saw a ~14% stake increase.Facebook Inc. (FB): FB is a 2.32% of the portfolio position established in Q1 2020 at prices between $146 and $223 and it is now at ~$271. Last two quarters saw a ~70% selling at prices between ~$154 and ~$304 while this quarter there was a similar increase at prices between ~$258 and ~$295.SS&C Technologies (SSNC): SSNC is a 2.22% position primarily built last quarter at prices between ~$56 and ~$65 and it is now at ~$66. There was a ~9% increase this quarter.Healthpeak Properties (PEAK): The 1.12% PEAK position was purchased last quarter at prices between $25.50 and $29 and it now goes for $31. This quarter saw a marginal increase.Colony Capital (CLNY): The ~1% 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 in Q2 2020 at prices between $1.42 and $3.10. Since then, the activity has been minor. Their overall cost-basis is ~$12.50 per share. CLNY currently trades at $5.51. They control ~5% of the business.Reinvent Technology (RTP) units: RTP is a SPAC that had an IPO last quarter. Baupost increased the stake by ~30% this quarter at prices between $10.75 and $12.60. The units currently trade at $15.46.Note: Reinvent Technology spiked roughly 30% last week following a report by FT that they are in merger talks with Joby Aviation for a ~$6B EV deal.Stake Decreases: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 fourth-largest in the portfolio at ~7.5%. The stock currently trades at ~$32. This quarter saw a ~15% trimming.Pershing Square Tontine (PSTH) and warrants (PSTHWS): PSTH is a 3.25% of the 13F portfolio stake established last quarter. Pershing Square Tontine is a ~$4B SPAC that had an IPO last July. The units started trading at ~$21.50. Separate trading of the stock and warrants started around mid-September. They currently trade at ~$30 and ~$14 respectively. The common stake was reduced by ~27% during the quarter at prices between ~$22.25 and ~$27.75.Atara Biotherapeutics (ATRA): ATRA is a 1.65% 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: Q3 2019 also saw a ~20% stake increase at prices between $12 and $20. Q2 2020 saw a similar increase at prices between $7.50 and $14.93. The stock currently trades at $18.59. This quarter saw a ~8% trimming.Note: Klarman controls ~11% of the business.ViacomCBS (VIAC) previously CBS Corporation: VIAC is a 1.62% 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. Q1 2020 saw another one-third increase at prices between $11.25 and $42. There was a ~16% selling next quarter at prices between $12.43 and $28.51. That was followed with a ~75% reduction this quarter at prices between ~$27 and ~$37. The stock currently trades at $58.31.Alphabet Inc. (GOOG) (GOOGL): The 2.46% GOOG stake was purchased in Q1 2020 at prices between $1057 and $1527 and the stock currently trades at ~$2100. Last three quarters saw a ~75% selling at prices between ~$1098 and ~$1830.Vista Oil & Gas (VIST): VIST had an IPO in July 2019. Shares started trading at $9.25 and currently goes for $2.80. The position saw a ~25% selling last quarter at prices between ~$2 and ~$3.70. That was followed with a ~55% selling this quarter at prices between ~$2 and ~$2.90.Kept Steady:Liberty Global (LBTYK) (TBTYA): LBTYK is currently the second-largest position at ~14% 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. There have been minor increases since. The stock currently trades at $24.78.ViaSat (VSAT): VSAT is a large position at ~5% 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. In July, Baupost participated in ViaSat’s 4.47M share private placement by acquiring ~2.56M shares at ~$39 per share. The stock currently trades at ~$60.Note: Baupost controls ~24% of the business.Micron Technology (MU): MU is a 3.62% of the portfolio position purchased last quarter at prices between $42.50 and $52.65 and the stock currently trades at ~$88.PG&E Corporation (PCG): PCG is a 3.53% stake built during the first three quarters of 2018 at prices between $38 and $47. Q2 2019 saw another 58% stake increase at prices between $6 and $24. The three quarters thru Q2 2020 had seen a ~80% reduction at prices between ~$6.50 and ~$18. Last quarter saw the position rebuilt at prices between $8.60 and $10. The stock currently trades at $11.80.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. Baupost collected ~$3B on those payments last August.Translate Bio (TBIO): The ~3% 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 in Q2 2020 at ~$22 per share. The stock is now at $27.59.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.Nexstar Media Group (NXST): The ~2% 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 ~$129.Theravance Biopharma (TBPH): TBPH is a 1.43% 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 $19.66. Last quarter saw a ~6% trimming.Note: Klarman controls ~18% of the business. The 13F also lists a small position in Theravance Biopharma Notes.Verint Systems (VRNT): The 1.19% VRNT stake was built last quarter at prices between ~$42 and ~$51 and the stock currently trades at $50.75.Veritiv Corporation (VRTV): VRTV is a 0.68% 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 below the low end of those ranges at ~$22.Note: Klarman’s ownership interest in VRTV is ~23%.Broadstone Acquisition (BSNU): Broadstone Acquisition is a SPAC that had an IPO last quarter. Units currently trade at $10.25. Baupost has a ~10% stake in the business.Trilogy Metals (TMQ): The very small 0.22% 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 Q4 2020:Regulatory filings thru 11/14/2020: 13D/A 11/4, 10/23 Form 3, 10/23 13D – GTXMQ – Garrett Motion – 3.58M shares – 4.72% of business – debt related filing – equity commitment parties to beneficially own 54.2% of the outstanding shares per amendment 1. They committed $1050M of new shares in reorganized business. Also rights offering. 13G/A – 10/9 – AKBA - 0."