This content is from: Portfolio

Morning Brief: Amazon’s Stock Suffers From Trump Grudge

The hedge fund favorite’s shares fell after a report said President Trump wants to get tougher on its tax treatment.

  • By Stephen Taub

Wednesday was Amazon.com’s turn to be the popular hedge fund stock suffering a sharp drop in price. Shares of the e-commerce pioneer fell 4.4 percent, to close at $1431.42, after Axios reported that President Trump wants to change Amazon’s favorable tax treatment.

“He’s wondered aloud if there may be any way to go after Amazon with antitrust or competition law,” a source who has spoken with the president told the website. It is little secret Trump has it in for Amazon.com founder Jeff Bezos, who privately owns The Washington Post. At year-end, Amazon.com was the fourth most widely held stock among hedge funds, according to Novus. It is also a favorite among short sellers, including David Einhorn’s Greenlight Capital.

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Investors pumped another $11.87 billion into hedge funds in February, bringing the year-to-date total to $21.83 billion, according to data tracker eVestment. It stresses that the early-year demand for hedge fund products is the largest since 2014. In 2017, hedge funds pulled in a net $28.62 billion for the full year after suffering a net $48 billion in redemptions in 2016. Long-short equity was the only strategy among 11 that suffered net outflows last month. However, it is slightly positive for the year and enjoyed the highest net inflows in 2017.

“February flows have historically set the stage for what to expect for the full year,” eVestment states in its monthly report. “In 2016, when the industry experienced its first annual net outflow since 2009, allocations in that February were the lightest since, well, February 2009.”

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Institutional investors currently have more than $2 trillion invested in hedge funds, according to a new report from data provider Preqin. This is roughly two-thirds of the total $3.33 trillion invested in the hedge fund industry, according to eVestment. More than 5,250 institutions — roughly 45 percent of the total institutional investor universe — are actively invested in hedge funds, according to Preqin. However, just three investor types account for more than half of all institutional capital in hedge funds.

For example, public pension funds and private sector pension funds account for 22 percent and 19 percent of institutional capital in hedge funds, while just 24 individual sovereign wealth funds invest in hedge funds, but account for 10 percent of invested capital. On the other hand, the sum of the total hedge fund investments made by endowments and foundations are on par with sovereign wealth funds, each accounting for 10 percent of institutional capital.

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Perceptive Advisors boosted its stake in Agile Therapeutics to 3.53 million shares, or 10.3 percent of the women’s-oriented healthcare company.

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Bill Ackman’s Pershing Square Holdings is down 4.1 percent for the month through March 27. This extends its loss for the year to 9.7 percent.

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