Billionaire Investor Daniel Loeb Adapts to Avoid Short Squeezes

Billionaire Investor Daniel Loeb: On Tuesday, billionaire investor Daniel Loeb said he was putting less money into single-name companies. This kept his business, Third Point, from being hurt by short squeezes.

Loeb says it’s more complicated than ever to sell short. The letter states that Reddit boards and option expiration dates can no longer be used to predict how well a company will do financially.

Short squeezes happen when the price of a company goes up quickly, making bad bets more expensive. Buyers have to buy short-term contracts, which could cost them.

In February, Loeb, who runs Third Point, was in charge of $12.6 billion. This quarter, the five stocks that did best for him were PCG_pa.A, Microsoft, Amazon, Alphabet, and Ferguson (FERG.L). Last quarter, the stocks that did the worst for Loeb were Alibaba Group Holding (9988. HK), Danaher (DHR.N), Catalent (CTLT.N), International Flavors & Fragrances, and a secret position that he wouldn’t talk about. We reached out to nine companies, but they have yet to reply.

Billionaire Investor Daniel Loeb

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The letter said that the Third Point Offshore Fund had lost 3% for the year up to June 30, even though it had gained 1.1% for the quarter. The letter says that AI companies make up half of Loeb’s net long stake.

AI will need more resources as it gets better at collecting, learning, and reacting. The study said that the biggest cloud-based software companies will gain from Microsoft Azure, Amazon Web Services, and Google Cloud Platform because they outsource their computers and data.

The business credit team at Third Point made 8.7% in the quarter. Loeb said that the market had changed because of the financial situation in March, which gave the fund a chance. The statement says that Loeb’s home mortgage and structured credit holdings grew by 3.2% and 4.1% this year.

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