Lone Pine Capital, Coatue Management and Viking Global Investors, firms run by protegees of Julian Robertson, cut their stakes in American depositary receipts of China’s largest search engine Baidu Inc. in the second quarter before the stock slumped.
Lone Pine, the hedge fund firm led by Stephen Mandel, sold its entire position, valued at $1.1 billion at the end of March. Philippe Laffont’s Coatue sold about three quarters of its holdings in Baidu during the second quarter, leaving it with a stake of $156 million. Andreas Halvorsen’s Viking almost halved its investment in the internet firm during the period to $256 million as of June 30.
The so-called Tiger cubs, who had worked at Robertson’s Tiger Management hedge fund, have been some of the biggest backers of Chinese internet stocks. Baidu was their most popular holding at the end of the fourth quarter, according to data for 19 of the managers, which included managers Robertson had funded. Another popular position was Alibaba Group Holding Ltd.
The hedge funds cut Baidu before an 18 percent slump in the shares. The company on July 27 posted earnings and forecast sales that missed analysts’ estimates amid higher costs and a slowing Chinese economy.
Chase Coleman’s Tiger Global Management sold the majority of its ADRs in Alibaba Group Holding Ltd. It owned shares worth $557 million in at the end of March. By June 30, its stake had shrunk to $7.69 million.
The firm more than doubled its stake in JD.com Inc. before the stock tumbled this month on worries about increased competition for the online retailer and a slowing Chinese economy.
Other prominent investors that trimmed Alibaba during the second quarter included the family office of billionaire investor George Soros and Magnetar Financial. Soros Fund Management owned about $370 million of Alibaba’s ADRs at the end of the first quarter. As of June 30, it held a stake worth $4.9 million.
Alibaba has lost about $100 billion of its value since November’s record high.