Big Investors Are Buying Gitlab (GTLB) Stock. Here’s Why.

Shares of Gitlab (NASDAQ:GTLB) are in focus after it was reported that two institutional investors had purchased shares of GTLB stock. HMI Capital Management disclosed its position on April 5, while BlackRock (NYSE:BLK) disclosed its position today. Gitlab operates as a development operations (DevOps) platform that “spans the entire software development lifecycle.”

The GitLab (GTLB) logo on an iPhone screen.
Source: Lori Butcher / Shutterstock.com

Two Big Investors Buy GTLB Stock

HMI Capital reported that it had purchased 1.43 million shares of Gitlab in a 13G form. The shares purchased equates to a 8.2% stake. The investment firm had previously not owned any shares of the company. In addition, HMI Capital has an average holding period of five quarters, or 1.25 years. This suggests that the firm sees potential upside for Gitlab in the next year. Based on the latest data, HMI Capital has an assets under management (AUM) of $4.17 billion.

Meanwhile, BlackRock reported that it had purchased 327,244 shares of Gitlab, increasing its existing position by 13%. After the purchase, the firm now owns 2.8 million shares, which equates to a 10.4% stake. Furthermore, BlackRock has an average holding period of 23.43 quarters, or 5.8 years. This suggests that the firm sees a long-term opportunity in Gitlab for potential gains. As of Q4, BlackRock has an AUM of $3.92 trillion.

So, why did these two large investors decide to buy Gitlab? Institutional investors are not required to disclose their reasoning for buys and sells. However, GTLB stock is down over 50% since its initial public offering (IPO) last year. The two institutional investors may believe that Gitlab’s valuation has come down to a reasonable price.

On the other hand, JPMorgan (NYSE:JPM) disclosed on April 5 that it had sold 567,878 shares of Gitlab, decreasing its existing position by 68%. After the sale, the investment bank still owns 259,088 shares.

Who Else Is Betting Big on Gitlab?

Tracking institutional ownership is important, as these large funds provide liquidity and price support for stocks. Since Gitlab debuted publicly last October, there is no data to compare current statistics to. During Q4, 108 funds reported owning the company. In addition, out of those 108 funds, nine of them own Gitlab in their top 10 positions. With that said, let’s take a look at Gitlab’s largest shareholders as of Q4:

  1. Sid Sijbrandij, co-founder and CEO: 21.69 million shares.
  2. Khosla Ventures: 19.02 million shares.
  3. ICONIQ Strategic Partners: 18.24 million shares.
  4. August Capital: 14.93 million shares.
  5. Google Ventures (NASDAQ:GOOG, NASDAQ:GOOGL): 8.88 million shares.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/big-investors-are-buying-gitlab-gtlb-stock-heres-why/.

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