Latest news with #DanielLoeb
CNBC
30-05-2025
- Business
- CNBC
Daniel Loeb's next task as his hedge fund turns 30: Avoiding becoming 'AI roadkill'
Daniel Loeb has found himself a new goal as his hedge fund Third Point entered its milestone 30th year: To be a true winner in the red-hot artificial intelligence boom and not run over by it. "Change is happening at an ever accelerating and increasing rate and it's just going to require us to continue to be even more nimble, and to use AI as your own tool to stay on top of what's going on," Loeb told CNBC's Scott Wapner at Third Point's investor day Thursday. "You'll either be a beneficiary of AI or AI roadkill. So I think we all need to do our best to not be the latter." AI has dominated Wall Street's investing theme over the past two years as investors left and right seek to hit home runs in the space, from chipmakers to hardware producers to car companies and utilities. Loeb, once known for his sharp brand of activism, has emerged as a big AI bull in recent years, increasing his fund's AI exposure to nearly half of its equity portfolio in 2024. Ways Loeb is playing AI The hedge-fund investor not only owns "legacy" companies like Meta , Nvidia , Microsoft and Amazon — which he said have built enormous competitive advantages — but he is also betting on AI beneficiary London Stock Exchange Group and chipmaker Taiwan Semiconductor Manufacturing . "It's a pervasive component of our research process... It's a variable in which we benchmark all of the companies that we invest in, both in terms of how they're using it… whether it's cloud companies or Amazons or Microsofts and how they're directly benefiting from it," Loeb said. Three decades ago, Loeb started Third Point with $3.2 million cobbled together from friends and family. Today, the hedge fund touts over $20 billion assets under management and net returns of 15% since inception, weathering the dotcom crash, the 2008 financial crisis and the Covid pandemic. Known for being one of the best activist investors ever, he's grown the firm to include a significant credit and venture business. On today's market environment, Loeb believes the short-term uncertainty will start to fade by next year and investors picking quality, growth stocks with fair prices will be rewarded in the long run. "I think it will be ok.. I think we'll start looking towards a better, more predictable 2026," Loeb said. "I think there will definitely be winners and losers. The economy will grow at about a one-percent rate unless something comes out of left field, so I think it's a good environment for investing in growthy companies at good valuations." He also revealed that Third Point got back into US Steel a month or so ago in the $30s range in a bet that its path to a deal with Nippon Steel would materialize. CNBC reported this week that Nippon is expected to close acquisition of U.S. Steel at $55 per share.
Yahoo
23-05-2025
- Business
- Yahoo
Billionaire Daniel Loeb Is Buying This Oversold Artificial Intelligence (AI) Stock -- Should You Be, Too?
Billionaire investor Daniel Loeb took a big stake in Alphabet in the first quarter. He feels the market is missing the big AI advantages that this company has. The stock is trading at an attractive valuation -- presenting an opportunity for investors. 10 stocks we like better than Alphabet › Billionaire Daniel Loeb of Third Point Management is known as a value investor, and last quarter he was picking up shares of beaten-down tech giant Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Alphabet's stock is down about 13% year to date as of this writing, as investors worry about the future impact of artificial intelligence (AI) on its search business. However, Loeb has a different view and bought $453 million worth of Alphabet stock in the quarter. Here's why. Loeb wrote exactly why he was buying Alphabet stock in Third Point's first-quarter letter to investors. These investment letters are common in the hedge fund industry and give investors a quarterly update on a fund's investment performance. Portfolio managers will also often highlight a few investment ideas or talk about the current investing or macro environment in these letters. In his letter, Loeb told investors that he made a significant investment in Alphabet in the quarter, while acknowledging the market's worry about AI search and chatbots on Google search. He said that this concern is not entirely unfounded, but that Alphabet has advantages that are being overlooked. The first big advantage Loeb noted that Alphabet has is distribution. While he did not go into the particulars, this can be seen in several areas. First and foremost, the company is currently the default search engine on billions of devices. It provides the operating system for Android devices, which use its search engine. Android is estimated to power around 70% of the world's smartphones. Alphabet also owns the world's most widely used search browser, Chrome, where it is also the default search engine. In addition, it currently has a revenue-sharing search deal to be the exclusive search engine on Apple devices. This gives it access to another nearly 30% of the market not powered by Android. It also has revenue-sharing deals with other browsers, such as Opera. In addition, Alphabet owns one of the world's largest advertising networks. It really can't be underestimated how much time and effort the company has put into developing its local ad presence. While AI companies are still trying to figure out the best way to monetize their offerings, Alphabet can connect advertisers with consumers on everything from a global to a local level. This is a huge monetization advantage over competitors. The second big advantage Loeb said Alphabet has is technology. He noted that some initial Gemini AI model blunders caused investors to forget that Alphabet has been building out its AI capabilities for over a decade. He highlighted that a paper by Google engineers paved the way for the widespread use of large language models (LLMs), while the company has two leading AI research organizations in Google Brain and DeepMind. He believes that Alphabet is close to beginning to monetize Gemini in a meaningful way. As for the impact on Google search, Loeb envisions a world where generative AI takes content creation costs to near zero, leading to more internet content, whether it be articles, entire websites, or video. However, with this increased content, it will become more difficult and expensive for businesses to stand out and attract customers. In a world flooded with low-quality and fake AI-generated content, he thinks Google Search will become even more valuable as a source of truth. Loeb said he is also encouraged by Alphabet's recent cost discipline and how it is taking a tougher stance on employee protests. Back in 2018, Alphabet had canceled a large military AI project, Project Maven, due to employee protests -- and Palantir Technologies would take over the project as a result. While there is a Google search disruption risk, Loeb lays out a nice argument as to why he does not think this will happen and why Alphabet will be an AI winner. I also think it's important to note that traditionally the company only serves ads on 20% of its search queries. Even if AI shrinks overall search queries, it could ultimately make them more valuable to advertisers. At the same time, with its large ad network, Alphabet should also be able to find new ways to monetize things like AI Overviews, expanding its overall search revenue opportunities. And of course, Alphabet is also about much more than search. It also owns the most-watched streaming platform in the world and the third-largest cloud computing business. Cloud computing, in particular, has been a big growth driver for the company, and it is investing heavily to keep up with the growing demand for its services. Its Waymo robotaxi business is also growing rapidly and has the potential to be its next big business. Trading at a forward price-to-earnings ratio (P/E) of 17 times 2025 analyst estimates, the stock is in the bargain bin, making it an attractive option to buy at current levels. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $644,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $807,814!* Now, it's worth noting Stock Advisor's total average return is 962% — a market-crushing outperformance compared to 169% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet and Opera. The Motley Fool has positions in and recommends Alphabet, Apple, and Palantir Technologies. The Motley Fool has a disclosure policy. Billionaire Daniel Loeb Is Buying This Oversold Artificial Intelligence (AI) Stock -- Should You Be, Too? was originally published by The Motley Fool Sign in to access your portfolio
Reuters
21-05-2025
- Business
- Reuters
Loeb's Third Point Investors Ltd to become holding company with acquisition
NEW YORK, May 21 (Reuters) - Billionaire investor Daniel Loeb is transforming his London-listed investment company into an insurance holding company following years of criticism about its valuation discount to his New York-based hedge fund Third Point. Third Point Investors Limited (TPIL)(TPOGu.L), opens new tab, which listed on the London Stock Exchange in 2007, said on Wednesday that it will acquire Malibu Life Reinsurance SPC, a life annuity reinsurer which Loeb launched last year. The stock-for-stock deal will be voted on by shareholders. Given Loeb's high ownership stake, it is likely to be approved at the vote, which is expected to occur in the third quarter. TPIL is considering a tender offer that would allow investors to get a better price for their shares than on the open market. Like other UK-listed investment companies, TPIL is known as a feeder fund and was originally designed to give retail shareholders a taste of hedge funds that had long been off limits to all but the wealthiest and largest financiers. TPIL, which has roughly $500 million invested in Third Point's flagship Offshore hedge fund, will invest principally in Third Point's various credit strategies. By the end of 2027, the new reinsurance operating company expects to deliver mid-teens returns, the company said in a statement. Last year TPIL gained 25.5% after fees. This year it is roughly flat. The merger is designed to end years of complaints about a persistent gap between where the fund's shares trade and their underlying net asset value. Criticism about the double-digit discount even turned Loeb, who has waged activist campaigns at companies including Nestle (NESN.S), opens new tab, Walt Disney (DIS.N), opens new tab and Campbell's (CPB.O), opens new tab, into a target for other activist investors. Four years ago TPIL shareholder Asset Value Investors took public aim at the TPIL discount, and TPIL took steps, including share buybacks, to address it. But the discount, which persists at many such companies, continues to annoy certain investors. Earlier this year, U.S. activist investor Boaz Weinstein, who waged war against certain BlackRock (BLK.N), opens new tab investment products, turned his attention to the UK where he targeted several local investment trusts with the aim of overhauling their boards. Last year, without direct pressure from outsiders, TPIL appointed two independent directors -- activist investors Dimitri Goulandris and Liad Meidar -- to its board to lead a months-long strategy review, which led to this move. The board, which is independent of Loeb and Third Point, earlier this week unanimously approved the planned transaction. TPIL will own an interest in the Third Point hedge fund and in Malibu after the transaction is finalized. It said it would likely meet Malibu's ongoing capital needs by periodically redeeming capital from the hedge fund. Ultimately, TPIL will become a pure-play operating company within the next 18 months to 36 months. Late last year, Third Point purchased hedge fund manager AS Birch Grove to help build out its credit platform. Third Point's move echoes recent steps by other investors, including Pershing Square Capital Management's Bill Ackman, who earlier this month took a listed real estate development company, in which he already owned a stake, and transformed it into a diversified holding company that will buy stakes in other companies.
Yahoo
21-05-2025
- Business
- Yahoo
Loeb's Third Point Investors Ltd to become holding company with acquisition
By Svea Herbst-Bayliss NEW YORK (Reuters) -Billionaire investor Daniel Loeb is transforming his London-listed investment company into an insurance holding company following years of criticism about its valuation discount to his New York-based hedge fund Third Point. Third Point Investors Limited (TPIL), which listed on the London Stock Exchange in 2007, said on Wednesday that it will acquire Malibu Life Reinsurance SPC, a life annuity reinsurer which Loeb launched last year. The stock-for-stock deal will be voted on by shareholders. Given Loeb's high ownership stake, it is likely to be approved at the vote, which is expected to occur in the third quarter. TPIL is considering a tender offer that would allow investors to get a better price for their shares than on the open market. Like other UK-listed investment companies, TPIL is known as a feeder fund and was originally designed to give retail shareholders a taste of hedge funds that had long been off limits to all but the wealthiest and largest financiers. TPIL, which has roughly $500 million invested in Third Point's flagship Offshore hedge fund, will invest principally in Third Point's various credit strategies. By the end of 2027, the new reinsurance operating company expects to deliver mid-teens returns, the company said in a statement. Last year TPIL gained 25.5% after fees. This year it is roughly flat. The merger is designed to end years of complaints about a persistent gap between where the fund's shares trade and their underlying net asset value. Criticism about the double-digit discount even turned Loeb, who has waged activist campaigns at companies including Nestle, Walt Disney and Campbell's, into a target for other activist investors. Four years ago TPIL shareholder Asset Value Investors took public aim at the TPIL discount, and TPIL took steps, including share buybacks, to address it. But the discount, which persists at many such companies, continues to annoy certain investors. Earlier this year, U.S. activist investor Boaz Weinstein, who waged war against certain BlackRock investment products, turned his attention to the UK where he targeted several local investment trusts with the aim of overhauling their boards. Last year, without direct pressure from outsiders, TPIL appointed two independent directors -- activist investors Dimitri Goulandris and Liad Meidar -- to its board to lead a months-long strategy review, which led to this move. The board, which is independent of Loeb and Third Point, earlier this week unanimously approved the planned transaction. TPIL will own an interest in the Third Point hedge fund and in Malibu after the transaction is finalized. It said it would likely meet Malibu's ongoing capital needs by periodically redeeming capital from the hedge fund. Ultimately, TPIL will become a pure-play operating company within the next 18 months to 36 months. Late last year, Third Point purchased hedge fund manager AS Birch Grove to help build out its credit platform. Third Point's move echoes recent steps by other investors, including Pershing Square Capital Management's Bill Ackman, who earlier this month took a listed real estate development company, in which he already owned a stake, and transformed it into a diversified holding company that will buy stakes in other companies. Sign in to access your portfolio
Globe and Mail
20-05-2025
- Automotive
- Globe and Mail
Dan Loeb Says Goodbye to Tesla Stock. Should You Follow the Billionaire and Sell TSLA Shares Now?
Tesla (TSLA) is the largest automobile manufacturer in the world, valued above $1.1 trillion. Shares of the electric vehicle maker went public in June 2010 and have since returned more than 25,000% to investors. While Tesla stock has delivered game-changing returns to long-term shareholders, it has underperformed the broader market in 2025 due to headwinds such as still-high interest rates, rising competition, slowing consumer demand, and narrowing profit margins. Today, Tesla stock trades 30% below its all-time highs and remains a volatile investment. Notably, hedge fund manager Daniel Loeb's recent 13F shows a defensive market stance. The fund manager purchased SPDR S&P 500 ETF (SPY) puts and exited positions in Meta (META) and Tesla while reducing stakes in other big tech companies including Amazon (AMZN) and Microsoft (MSFT). He initiated new positions in Nvidia (NVDA), Pinterest (PINS), AT&T (T), and consumer and real estate companies, suggesting a strategic pivot toward defensive sectors amid tariff-related economic uncertainty. Should you follow the billionaire and sell TSLA stock right now? Is Tesla Stock a Good Buy Right Now? Tesla delivered lackluster first-quarter results as the electric vehicle maker navigated a production transition across all four factories for its best-selling Model Y. Revenue declined 9% year-over-year to $19.3 billion, while GAAP operating income fell 66% to $399 million, indicating a 2.1% operating margin. Tesla delivered 336,681 vehicles in Q1, down 13% year-over-year, due to several weeks of lost production during the Model Y changeover. Despite this temporary setback, Tesla emphasized that this simultaneous global production line update was an 'industry first,' demonstrating its advanced operational capabilities. Energy Generation and Storage remained a bright spot, with revenue growing 67% year-over-year to $2.7 billion. Tesla's Shanghai Megafactory produced over 100 megapacks during the quarter, although they weren't counted in quarterly deployments as they were en route to customers. Tesla's autonomous vehicle efforts continue advancing rapidly, with Model 3, Model Y, and Cybertruck now driving autonomously from production lines to outbound lots in Fremont and Texas factories. The company reaffirmed plans for a pilot launch of its Robotaxi in Austin by June, with Optimus robot production beginning in 2025. What's Next for TSLA Stock? Looking ahead, Tesla highlighted significant uncertainty around evolving trade policies and their impact on global supply chains. Tesla ended Q1 with $37 billion in cash. It generated $2.2 billion in operating cash flow and $664 million in free cash flow. Management confirmed plans for new, more affordable vehicle models with production starting in the first half of 2025. Tesla expects these vehicles to help drive more than 60% growth over 2024 production levels by utilizing existing manufacturing lines, enabling a more capital-efficient approach during uncertain economic times. Analysts tracking TSLA stock expect adjusted net income margins to improve from 8.6% in 2024 to almost 16% in 2029. In this period, free cash flow margins are forecast to expand from 3.7% to 11.8%. However, investors should take these projections with a pinch of salt, given Tesla has missed Wall Street earnings estimates in several recent quarters. Out of the 41 analysts covering TSLA stock, 16 recommend 'Strong Buy,' two recommend 'Moderate Buy,' 13 recommend 'Hold,' and 10 recommend 'Strong Sell.' The average target price for TSLA stock is $284, below the current trading price.
