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Chase Coleman Cuts Back on Roblox, Casts Lot With Robinhood

A look at Tiger Global Management's top 3rd-quarter trades

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Nov 18, 2021
Summary
  • The firm’s top buys for the quarter were Warby Parker and Robinhood Markets.
  • It cut its stakes in Roblox and Apollo Global Management.
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Chase Coleman (Trades, Portfolio)’s Tiger Global Management recently disclosed its 13F portfolio updates for the third quarter of 2021, which ended on Sept. 30.

Coleman founded Tiger Global Management in 2001, when hedge fund legend

Julian Robertson (Trades, Portfolio) gave him $25 million to start his own fund. The fund’s strategy is to deploy capital globally, focusing on big tech stocks as well as early- and late-stage venture, post-initial public offering, private equity and secondary market small caps.

Based on its latest quarterly filing, the firm’s top buys for the quarter were Warby Parker Inc. (

WRBY, Financial) and Robinhood Markets Inc. (HOOD, Financial). Meanwhile, it cut its stakes in Roblox Corp. (RBLX, Financial) and Apollo Global Management Inc. (APO, Financial).

Warby Parker

Tiger Global Management established a 15,132,681-share position in Warby Parker Inc. (

WRBY, Financial), giving the stake a weight of 1.54% in the equity portfolio. Shares were trading for an average price of $53.77 apiece in the three months through September.

Warby Parker is an online eyeglasses retailer based in New York City. It produces and sells prescription glasses and sunglasses primarily via its online marketplace, though it does have some physical retail locations in the U.S. and Canada.

The company has a financial strength rating of 8 out of 10; after a successful IPO, it has no debt and plenty of cash on its balance sheet. There is currently not enough filing information for this stock to get a GuruFocus profitability ranking, but the operating and net margins are both in the negatives, suggesting the company is not yet profitable.

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Shares of the company traded around $54.24 each on Nov. 18 for a market cap of $7.10 billion. The share price is at about the same place it was when company went public in late September.

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Robinhood Markets

Coleman’s firm also purchased 13,664,001 shares of Robinhood Markets (

HOOD, Financial), which gives the stock a 1.10% weight in the equity portfolio. During the quarter, shares traded hands for around $45.44 each.

Robinhood is the financial services company behind its popular namesake trading app. Based in Menlo Park, California, the company is known for being the pioneer in commission-free trading of stocks, exchange-traded funds and cryptocurrencies, making its money by payment for order flow.

GuruFocus gives Robinhood a financial strength rating of 4 out of 10 on the back of cash being higher than debt. The company earns a profitability rating of 1 out of 10 due to the bottom line declining even as the top line grows.

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Shares traded around $30.53 apiece on Nov. 18 for a market cap of $26.43. The stock price is down 12% since the company went public near the end of June earlier this year.

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Roblox

The firm pared back its Roblox (

RBLX, Financial) investment by 9,961,475 shares, leaving a remaining holding of 17,430,822 shares and impacting the equity portfolio by -1.67%. Shares traded for an average price of $82.17 during the quarter.

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Roblox’s namesake video game is available on phones, tablets and consoles. The game, which is free to download, provides a customizable virtual universe where players create their own avatars and environments. The company generates revenue from the sale of its in-game currency, Robux.

The company has a financial strength rating of 6 out of 10 thanks to a Piotroski F-Score of 5 out of 9 and an Altman Z-Score of 16.18. Its profitability rating is rated 1 out of 10; while the operating and net margins are trending up, both are still negative, so the company is not profitable yet.

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Shares of Roblox traded around $125.62 each on Nov. 18 for a market cap of $72.51 billion. The stock has jumped 80% since the company went public back in March of this year.

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Apollo Global Management

Tiger Global Management reeled back its Apollo Global Management (

APO, Financial) holding by 8,689,603 shares, leaving a remaining investment of 22,362,873 shares. The trade had a -1% impact on the equity portfolio. During the quarter, shares were trading around $60.19 each.

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Apollo is a global alternative investment manager that invests in credit, private equity and real assets. The company raises, invests and manages credit, private equity and real assets funds as well as strategic investment accounts for institutional and individual investors.

The company has a financial strength rating of 4 out of 10; while the cash-debt ratio of 0.2 is low, the interest coverage ratio is sufficient at 6.35. Its profitability rating is 7 out of 10, driven by a 38% return on equity that is more than double the median for the asset management industry.

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Shares of Apollo traded around $75.70 each on Nov. 18 for a market cap of $18.67 billion. The GF Value chart rates the stock as modestly undervalued.

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Portfolio overview

As of the quarter’s end, the firm held shares in 161 stocks valued at a total of $52.06 billion. The turnover for the quarter was 7%.

Its top holdings were Microsoft Corp. (MSFT) with a 7.11% weight in the equity portfolio, JD.com Inc. (JD) with 7.10% and Sea Ltd. (SE) with 6.38%.

In terms of sector distribution, the firm was most invested in technology, consumer cyclical and communication services.

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Disclosures

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Portfolio updates reflect only common stock positions as per the regulatory filings for the quarter in question and may not include changes made after the quarter ended.
The views of this author are solely their own opinion and are not endorsed or guaranteed by GuruFocus.com
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