Baupost’s Seth Klarman found some buying opportunities among small-caps during the volatile first-quarter market, while trimming his holdings in a dozen SPACs that have been particularly hard hit by rising interest rates. The longtime value investor added about 1.3 million shares of Gray Television worth $28.5 million in late March, according to a recent 13F filing with the Securities and Exchange Commission. The Atlanta, Georgia-based TV network has a market cap of $1.9 billion, and its shares are down about 3% this year, outperforming the broader market. Klarman, who is often compared to Warren Buffett, also has small bets on breakfast cereal maker Post Holdings and its spin-off Bellring Brands, with its stakes worth $26.2 million and $11.1 million, respectively, at the end of the first Quarterly completed, according to the filing. Both companies have a market cap below $5 billion. Post Holdings is up almost 8% this year, while the Consumer Staples Select Sector SPDR Fund is little changed. Bellring’s stock is up about 1% since the spin-off in March. The hedge fund manager slashed its exposure to risky SPACs in the first quarter as the once red-hot market took a beating. Klarman exited a $150 million position in Bill Ackman’s Pershing Square Tontine Holdings and reduced the number of warrants in the SPAC. Here are 13 more SPAC and SPAC warrants he trimmed during the first quarter. Advantage Solutions Altimeter Growth Corp 2 WARRANTY: Aurora Innovation Inc. Dragoneer Growth Opportunity Corp. II Grab Holdings Joby Aviation WARRANTY: Joby Aviation Liberty Media Acq. Co. WARRANTY: Pershing Square Tontine Holdings WARRANTY: Redball Acq. corp SVF Investment Corp. WARRANT: SVF Investment Corp. WARRANT: Vertical Aerospace Ltd. SPACs – often speculative stocks with little or no income – have been crushed this year amid rising interest rates and heightened market volatility. The proprietary CNBC SPAC Post Deal Index, which consists of SPACs that have completed their mergers and taken their target companies public, is down more than 40% year-to-date. At the end of March, half of Klarman’s top positions were technology stocks, including Intel, Alphabet, Qorvo, Fiserv and ViaSat. Notably, Klarman increased its stake in Alphabet by 7% in late March to a $678 million stake. He also significantly expanded his position at Fiserv. The investor also liked Dropbox during the first quarter, increasing its stake by 30% to a $246 million stake. Klarman said in an investor letter earlier this year that rising inflation poses a “real threat” to markets and he is hedging against outsized gains.
https://www.cnbc.com/2022/05/16/bauposts-klarman-picks-up-small-caps-trims-a-dozen-plus-losing-spacs.html Baupost’s Klarman picks up small caps, trims a dozen and loses SPACs