The Morning Brief: Hedge Fund Favorite Uber Reports Another Large Loss

Millennial and hedge fund favorite Uber Technologies lost more than $800 million in the third quarter, expanding its loss for the first three quarters of the year to about $2.2 billion, according to a Bloomberg report citing a person familiar with the situation. At the same time, revenues continue to surge. The privately-held ride-sharing company has now generated roughly $3.76 billion in revenue in the first three quarters of the year. None of these results include the China market, which Uber exited earlier this year. Meanwhile, bookings came to $5.4 billion in the third quarter, compared with $5 billion in the previous period and $3.8 billion in the first quarter, according to Bloomberg.

Back in August Uber agreed to leave China under an agreement with Didi Chuxing. As part of the deal, Uber received a 17.5 percent stake in China-based Didi, while Didi invested $1 billion in Uber. It was earlier reported that Uber lost about $1.3 billion in the first half of the year.

Several high-profile hedge fund firms with roots in Julian Robertson Jr.’s Tiger Management have invested in Uber’s private stock and debt, including Stephen Mandel Jr.’s Greenwich, Connecticut-based Lone Pine Capital; Christopher Hansen’s San Francisco–based Valiant Capital Partners; and Paul Hudson’s Greenwich, Connecticut–based Glade Brook Capital Partners.


At a quick glance it may seem like most hedge funds are either up or down by single digits this year. However, the best performers are doing much better. According to HFR, the top 10 percent of hedge funds returned 14.77 percent, on average, for the first three quarters of the year. This is pretty good considering this was before the post-election Trump rally. At the same time, the bottom 10 percent of HFR’s hedge fund universe lost 7.05 percent, on average, through the third quarter. This compares with gains of 13.74 percent and a loss of 7.6 percent, respectively, in the first half of the year. Over the past four quarters, the top 10 percent ranked funds surged 29.54 percent, while the bottom decile fell on average by 15.57 percent. This works out to performance dispersion of about 45 percent.



That was quick. Chris Connor is closing Ardmore Global Investors less than one year after launching the tech-focused fund, according to Reuters. He will be joining Citadel’s Aptigon unit, its fourth stock-trading business. Ardmore was down 0.3 percent this year through November, according to the report. Connor is also the latest hedge fund manager with ties to Robertson’s Tiger Management to shut down his firm this year.

Connor is a former partner at John Thaler’s JAT Capital Management, having helped to launch the firm in 2007. He was senior technology, media and telecom sector head and remained until the firm returned capital to investors last year. Thaler is considered a Tiger Grandcub because he earlier worked for Tiger Cub Chris Shumway, who closed down his firm, Shumway Capital Partners, in early 2011. Shumway, in turn, earlier worked for Tiger Management. Connor says in his bio that he was the most profitable analyst at JAT.