"Tracking Dan Loeb’s Third Point Portfolio – Q3 2021 Update"
"Dan Loeb's 13F portfolio value increased from $17.08B to $18.32B this quarter. The number of positions decreased from 126 to 113.Third Point increased Amazon while decreasing Intel and dropping JD.com, SoFi Technologies, and Uber Technologies during the quarter.The top three positions are at ~34% of the portfolio: Upstart Holdings, SentinelOne, and Danaher.This article is part of a series that provides an ongoing analysis of the changes made to Dan Loeb’s 13F stock portfolio on a quarterly basis. It is based on Third Point’s regulatory  filed on 11/15/2021. Please visit our  to get an idea of their investment philosophy and our  for the fund’s moves during Q2 2021.This quarter, Loeb’s 13F portfolio value increased ~7% from $17.08B to $18.32B. The 13F portfolio is very concentrated with the top three holdings accounting for ~34% of the entire portfolio. The number of holdings decreased from 126 to 113. 38 of the holdings are significantly large (more than ~0.5% of the portfolio each) and they are the focus of this article. The largest five individual stock positions are Upstart Holdings, SentinelOne, Danaher Corp, PG&E, and Walt Disney.Third Point returned 29.5% thru September this year compared to 13.4% for the S&P 500 Index. Annualized returns since December 1996 inception are at 15.5% compared to 9.3% for the S&P 500 Index. AUM is distributed among several strategies of which the long/short equity portion is the majority: of the roughly two-thirds net portfolio exposure, 107.9% (over 100% due to leverage) is the net-long equity portion. In addition to partner stakes, Third Point also invests the float of Sirius Point (SPNT) and capital from London listed closed-end fund Third Point Offshore (TPNTF). To know more about Dan Loeb's Third Point, check-out his letters to shareholders at their site. His activist investing style is covered in the book "".Note 1: They have significant ownership stakes in several SPACs including participation in the PIPEs of two crypto de-SPAC deals – Fintech Acquisition V (FTCV) which announced a deal for eToro in March and Concord Acquisition (CND) which announced a deal for Circle in July.Note 2: They have a significant portfolio of investments thru their venture firm . The third quarter investor letter unveiled a significant position in Rivian Automotive (RIVN) made in two rounds: a small stake in late 2020 and a larger one in July this year prior to the IPO. Other such stakes include investments in Yellowbrick Data, Aryaka, Kentik, Kumu Networks, Ushur, CipherTrace, Bitwise, FTX, etc.Note 3: Large equity investments not in the 13F report include Sony (SONY), EssilorLuxottica (ESLOY), and Nestle (NSRGY). All three are activist stakes. SONY is a $1.5B investment made in June 2019 when the stock was trading at around $50 per share. It is currently at ~$120. The ESLOY investment was made in early 2019 when the stock was trading at ~$62.50 per share. It currently trades at ~$100. The NSRGY position is from 2017 and the stock has rallied from ~$75 to ~$130 now.New Stakes:Alight Inc. (ALIT) and Activision Blizzard (ATVI): These are the new positions this quarter. The ~1% of the portfolio stake in ALIT was purchased at prices between ~$8.50 and ~$13 and the stock currently trades at $9.97. The 0.84% of the portfolio ATVI position was established at prices between ~$73 and ~$94 and it is now well below that range at $57.36.Stake Disposals:SoFi Technologies (SOFI): SOFI was a 3.24% of the portfolio position established last quarter at prices between ~$14.50 and ~$24. The disposal this quarter was at prices between ~$13.75 and ~$19. The stock currently trades at $15.19.Note: Social Capital Hedosophia V merged with SoFi in a de-SPAC deal that closed in June.Uber Technologies (UBER): UBER was a 2.45% of the portfolio position purchased in Q1 2021 at prices between ~$48 and ~$63. There was a ~25% stake increase las quarter at prices between ~$44 and ~$61. The elimination this quarter was at prices between ~$38.50 and ~$52. The stock currently trades at $35.85.Note: Ride-sharing is a popular theme in Third Point’s portfolio. They had a successful exit from Lyft (LYFT) and currently has stakes in Didi and Grab Holdings. The stake in Grab Holdings & Didi Global go back to funding rounds from 2016. Also, they have a position in Altimeter Growth both from purchasing equity and committing to participation in the PIPE - AGC merged with Grab Holdings (GRAB) in a de-SPAC deal that closed last week.JD.com (JD): JD was a 1.35% of the portfolio stake established in Q2 2020 at prices between $40 and $62. There was a ~35% stake increase in Q3 2020 at prices between ~$60 and ~$83 while next quarter saw a ~25% selling at prices between ~$76 and ~$93. Last two quarters had also seen a combined ~15% trimming. The stake was sold this quarter at prices between ~$62 and ~$83. The stock currently trades at ~$78.Charter Communications (CHTR): The minutely small ~0.35% of the portfolio stake in CHTR was sold during the quarter.Stake Increases:SentinelOne (S): The large (top three) 7.62% of the portfolio SentinelOne stake goes back to 2015 when they led the Series B funding round at a post-money valuation of $98M. They participated in each subsequent round as well as the IPO and after-market. The stock currently trades at $46.23 at a valuation of ~$12B – their initial 2015 investment has so far returned a stunning ~120x. There was a minor ~5% increase this quarter.Amazon.com (AMZN): AMZN is a 3.32% of the portfolio position purchased in Q4 2019 at prices between $1705 and $1870. The stake saw a ~200% increase in Q1 2020 at prices between $1677 and $2170. The stock is now well above those ranges at ~$3390. There was a ~30% selling in Q4 2020 at prices between ~$3005 and ~$3444. Next quarter saw another ~20% reduction at prices between ~$2951 and ~$3380 while last quarter there was a ~27% stake increase at prices between ~$3094 and ~$3505. That was followed with a similar increase this quarter at prices between ~$3188 and ~$3731.Alphabet Inc. (GOOG): GOOG is a ~3% of the portfolio position purchased in Q4 2020 at prices between ~$1453 and ~$1828 and the stock is now well above that range at ~$2850. There was a ~20% reduction in Q1 2021 at prices between ~$1728 and ~$2138. Last two quarters saw a ~10% increase.CoStar Group (CSGP): CSGP is a 2.67% of the portfolio position purchased in Q1 2021 at prices between ~$76 and ~$94 and the stock currently trades near the low end of that range at $78.77. There was a minor increase in the last two quarters.Note: their investment thesis is that CoStar Group’s Ten-X acquisition should result in a second tailwind – “Bloomberg of CRE” to also be “Nasdaq of CRE” – cross-selling should result in revenue growth acceleration to 20% and EBITDA growth from 20% to 30% over time.Burlington Stores (BURL): The 2.45% portfolio stake in BURL was established in Q2 2019 at prices between $146 and $177. The position saw a ~115% stake increase next quarter at prices between $168 and $205. Q1 2020 saw a ~20% selling at prices between $121 and $248 while next quarter there was a similar increase at prices between $141 and $217. Q3 2020 also saw a ~20% stake increase at prices between ~$171 and ~$217. The stock currently trades at ~$289. Last three quarters have seen only minor adjustments.Avantor Inc. (AVTR): The 2.41% AVTR stake was established in Q3 2020 at prices between ~$17 and ~$23 and increased by ~235% next quarter at prices between ~$22.50 and ~$28. The stock currently trades at $38.27. Last two quarters have seen only minor adjustments.Dell Technologies (DELL): DELL is a 1.91% of the portfolio position built over the last two quarters at prices between ~$33 and ~$49 and it is now at $58.48. This quarter also saw a ~7% stake increase.Note: The prices quoted are adjusted for the ~$55 per share of value in VMWare (VMW) distributed to Dell shareholders in October.Catalent Inc. (CTLT), RH Inc. (RH), UnitedHealth (UNH), and Zimmer Biomet Holdings (ZBH): These small (less than ~1.5% of the portfolio each) stakes were increased this quarter.Stake Decreases:Upstart Holdings (UPST): UPST is currently the largest position at 21.42% of the portfolio. Third Point’s original position goes back to a Series C funding round in 2015 when the business was valued at ~$180M. They also added 1.2M shares in the December IPO. UPST started trading at ~$44 and currently goes for ~$172. This quarter saw a ~7% trimming.Note: They have a ~15% stake in Upstart Holdings and are sitting on gains of ~20x from ~$206M in total investments (~$66M six years ago and ~$140M at IPO). Their Q3 2021 letter had the following regarding this position: Upstart has started to upend FICO-dependent unsecured personal loan market with its AI-driven underwriting approach – also ramping up for the $685B auto lending market. The momentum is validated by the ~25% full-year guidance increase.Intel Corp (INTC): INTC is a 2.62% of the portfolio position built last quarter at prices between ~$53.50 and ~$68. The stock currently trades below that range at $49.25. There was a ~35% selling this quarter at prices between ~$52 and ~$57.Visa Inc. (V): The 1.70% Visa stake was established in Q2 2018 at prices between $118 and $136. The stock is now well above that range at ~$196. H1 2020 had seen a ~17% reduction at prices between $136 and $213 while next quarter there was a ~25% stake increase at prices between ~$189 and ~$217. This quarter saw a ~7% trimming.Paysafe Limited (PSFE): PSFE is a 1.67% of the portfolio position established in Q1 2021 at $10 per share as Third Point led the PIPE of this de-SPAC. The stock currently trades at ~$3.38. This quarter saw a ~5% trimming.Note: their Paysafe investment thesis is that as US is poised to become the largest online gambling market globally, Paysafe is positioned well to take advantage.Estee Lauder (EL): The 1.64% EL stake was built over the last three quarters at prices between ~$218 and ~$318 and the stock currently trades at ~$335. There was a ~9% trimming this quarter.Global Blue Group Holding AG (GB) and TE Connectivity (TEL): These two small positions (less than ~1% of the portfolio each) were reduced this quarter.Note: They have a ~5.2% ownership stake in Global Blue Group Holding.Kept Steady:Danaher Corp. (DHR): The top five 4.76% DHR stake was established in Q3 2015 at prices between $60.90 and $71.50 and increased by two-thirds in Q1 2016 at prices between $62 and $74. There was a ~20% stake increase in Q1 2019 at prices between $98 and $132 while H1 2020 saw a ~20% selling at prices between $129 and $177. It currently trades at ~$313. Last two quarters saw minor trimming.Note: The prices quoted above are adjusted for the Fortive (FTV) spin-off in July 2016.PG&E Corp (PCG): PCG is currently the third-largest 13F stake at 4.29% of the portfolio. Third Point’s Q2 2020 letter had the following regarding the investment in PG&E – the position came about as a result of participating in a PIPE (terms for the exit financing called for up to $10.50 per share purchase price). They believed the stock was undervalued as there are several risk mitigation measures in place – wildfire fund (insurance against wildfires), $3B per year investments in wildfire safety, ESG plans, etc. The stock currently trades at $11.81. There was minor trimming in the last two quarters.Walt Disney (DIS): DIS is currently at 3.83% of the portfolio. It was purchased in Q1 2020 at prices between $85 and $148. Next quarter saw a ~300% stake increase at prices between $94 and $127. The stock currently trades at ~$146. There was a ~13% selling in Q1 2021 and that was followed with a marginal reduction last quarter.Intuit Inc. (INTU): INTU is a 3.24% of the portfolio stake built over the four quarters through Q1 2021 at prices between ~$218 and ~$422. The stock currently trades at ~$648. Last quarter saw a ~8% trimming.Microsoft Corp (MSFT): The 2.46% of the portfolio MSFT stake was purchased in Q3 2020 at prices between ~$200 and ~$232. The two quarters through Q1 2021 had seen a ~60% stake increase at prices between ~$200 and ~$245. The stock currently trades at ~$323.S&P Global (SPGI): SPGI is a 2.32% stake established in Q2 2016 at prices between $96 and $128. The position has wavered. Recent activity follows: the five quarters thru Q1 2019 saw a combined ~60% selling at prices between $164 and $213. There was a ~30% stake increase over the two quarters through Q1 2021 at prices between ~$306 and ~$379. The stock is now at ~$456.Endeavor Group Holdings (EDR): EDR had an IPO in April. Shares started trading at ~$25 and currently goes for $29.29. Third Point’s position goes back to a private placement done concurrent with the IPO.Note: Endeavor Group Holdings used part of the proceeds from the IPO and private placement to fund the acquisition of a ~50% stake in Ultimate Fighting Championship (UFC) that they did not already own.Meta Platforms (FB) previously Facebook: The 1.85% FB position was purchased in Q2 2020 at prices between $154 and $242 and the stock is now at ~$307. Q3 2020 saw a one-third stake increase at prices between ~$230 and ~$304. There was a ~9% trimming in Q1 2021.Iqvia Holdings (IQV): The 1.63% IQV position was purchased in Q3 2018 at prices between $99 and $131 and increased by ~25% in Q3 2019 at prices between $143 and $162. There was a one-third selling last quarter at prices between ~$193 and ~$247. The stock currently trades at ~$262.TransDigm Group (TDG): The 1.53% TDG stake was purchased in Q3 2020 at prices between ~$411 and ~$519 and it is currently well above that range at ~$584. There was a ~12% stake increase in Q4 2020. Last quarter saw a ~7% trimming.Dupont De Nemours (DD): The 1.10% of the portfolio stake in DD was established in Q1 2021 at prices between ~$69 and ~$86 and it is now at $75.48. There was a ~11% stake increase last quarter.Didi Global (DIDI): DIDI had an IPO in June. Shares started trading at ~$15.50 and currently goes for $6.07. Third Point’s position goes back to a funding round in 2016 when the valuation was ~$30B. The current valuation is around the same.Aptiv plc (APTV), Black Knight Inc. (BKI), Cano Health (CANO), Leslie’s Inc. (LESL), PG&E (PCG) Units, and Suncor Energy (SU): These small (less than ~1.15% of the portfolio each) stakes were kept steady this quarter.The spreadsheet below highlights changes to Loeb’s 13F stock holdings in Q3 2021:Source: John Vincent. Data constructed from Third Point’s 13F filings for Q2 2021 and Q3 2021.Q2 2021 Letter, Monthly Reports, etc - -  .: Performance: thru July 14.7% vs 18% for S&P 500 index. 15% since 1996 inception vs 9.4% for S&P 500 Index. Exposure: 159.5% long and 40% short for a net exposure of  119.5% as of July. Commentary: Significant shift to “Growth Is Where the Value Is” theme since Q2 2018 has worked. Still has high conviction in companes like S&P Global, Visa, Danaher, Microsft, Google, Amazon, etc.  SentinelOne and Upstart – Our largest winner in Q2 was SentinelOne, which completed its initial public offering on June 30th. Today, it has a market cap of roughly ~$14 billion, over 4x its last private round valuation in November 2020. We first invested in SentinelOne in 2015, leading its Series B round at a post-money valuation of $98 million, and Robert Schwartz joined the board. After participating at each subsequent round, as well as in the IPO and after-market, we now own over 10% of the company and Rob remains a board member. still very positive after runup but more excited about the replicable process to invest in disruptors. Cryptocurrency – views it as a disruptive technology, impacting broad swaths of the economy. It is part of a broad transition to “Web 3.0” where the user is in control of their data and devices are connected securely – in time, centralized search, social media, and other apps should get replaced by dApps. Participated in the PIPEs of eToro and Circle. Also investments in private companies creating infrastructure – CipherTrace, Bitwise, FTX. Restoration Hardware (RH) – new stake – started building in Q4 2020 – high quality product with no discounting is a differentiator in the overall low-margin furniture business. Their stores draw high-income traffic that creates a “halo effect” – EBIT margins of ~20% and ROIC > 60% is proof. International Expansion (12 stores in Europe projected in next two to three years). Like all great luxury companies, RH has also realized that its design competency and brand cachet extend beyond its core product category, and they are expanding their TAM to include residential real estate development, lodging, restaurants, and more – and are pursuing this growth with a capital-light, high ROIC philosophy. Walt Disney – Transition to subscription based screaming is the growth area. Establishing a durable leadership position in the competitive global streaming market will require tough choices, aggressive investment, unwavering focus and consistent innovation.Regulatory filings from 5/31/2021 thru 8/29/2021: Form 4 – 8/24 – UPST - ~1M shares sold @ ~$203 per share – 12.4M shares remain. Form 3, 13G – 8/13 - Blue Whale Acquisition I – BWCA – 2M common and 500K wts included as part of common purchased – 10% of business. Form 4 – 7/16 – SentinelOne – S - ~200K shares purchased @ ~45 – 2.19M shares total. 13D/a – 7/12 – 26.51M shares – 43.5% of business. Form 4 – 7/2 - ~2M shares acquired at prices between ~$35 and ~$50. Form 3 – 6/30 – 62K common shares & ~24M in redeemable convertible preferred stock. 13G/A – 5/28 – KDMN – 7.6M shares – 4.4% of business."