Billionaire Dan Loeb Sold Off Disney (DIS) Stock. Here’s Why.

  • Dan Loeb’s Third Point sold all its shares of Disney (NYSE:DIS) stock
  • Loeb first purchased DIS during the first quarter of 2020
  • Third Point’s flagship fund lost 11.5% last quarter
Statue of Disney's (DIS) Mickey Mouse in Bangkok, Thailand.
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Shares of Disney (NYSE:DIS) are in the spotlight following news that Dan Loeb’s Third Point sold off its entire stake during Q1. DIS stock is down over 15% in the past month and down over 30% year to date. The company reported earnings this month, with revenue coming in at $19.25 billion. Total Disney+ subscriptions reached 137.7 million, beating the consensus estimate of 135 million.

Dan Loeb Sells DIS Stock

Yesterday marked the deadline for institutional investors to file a Q1 13F filing. The 13F filing details an investors’ portfolio positions as of March 31. This means that Loeb liquidated his 2-million-share stake in Disney before the company reported earnings this month. DIS has fallen by over 20% since March 31.

In a letter to investors, Loeb disclosed that Third Point had massively reduced its exposure to the market. The letter stated that “our net exposure is lower and buying power higher than at any time during the last 10 years.” This was due to rising interest rates, geopolitical tensions and weakness in the global economy. The hedge fund’s flagship fund, called the Third Point Offshore Fund, declined by 11.5% during Q1. Despite the decline, the fund still has an annualized return of 14.3% since its inception in 1996.

As of May 5, the fund had a beta-adjusted net equity exposure of only 23%, compared to 75% at the start of the year. Disney wasn’t the only company that Third Point fully liquidated. Other companies include Opendoor (NASDAQ:OPEN), Coupa Software (NASDAQ:COUP) and Restoration Hardware (NYSE:RH).

Who Else Is Betting Big on Disney?

Tracking institutional ownership is important, as these large funds provide liquidity and price support for stocks. Disney’s largest shareholder, the Vanguard Group, reported purchasing 2.5 million shares during Q1. After the purchase, the exchange-traded fund (ETF) company owns a total of 140.47 million shares. In total, 3,079 funds own DIS stock, a decrease of 179 funds from Q4. On top of that, the institutional put/call ratio lies at 1.34. This signifies that institutional investors in aggregate own more put options against the company than call options.

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.


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