Is this old news?
Soros and Owl Rock Stock
Barrons
INSIDE SCOOP
Soros Gains 8.2% in Small Tech Stock in Two Weeks
Soros recently bought $1.3 million more Sigma Designs shares and sold $80 million in shares of Owl Rock.
By Ed Lin
April 26, 2017 5:31 a.m. ET
George Soros isn’t the only American billionaire who challenges President Donald Trump’s policies, but he is probably the most outspoken.
Soros pens editorials in outlets such as The New York Times to take Trump to task for perceived persecution of immigrants. Soros is an immigrant himself and he declared in a recent piece, “This is not the America that attracted me.”
The America that did was one that gave opportunity for Soros to amass a fortune of more than $25 billion, according to the latest World’s Billionaires List in Forbes.
But Soros was also on the receiving end of another, perhaps deeper and more personal, offense dealt by Trump: Soros lost big money (even for him) after the election. In the market rally following Trump’s win, The Wall Street Journal estimated that Soros lost about $1 billion in his personal accounts.
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Soros’ latest position changes — in his portfolio, not his political stance — could be seen as adjustments for a better outcome under a Trump administration. Earlier this month, entities controlled by Soros bought almost $1.3 million in additional shares of Sigma Designs (ticker: SIGM), a challenged chip maker, and sold nearly $80 million in shares of alternative asset manager Owl Rock Capital Partners.
Apparently Soros has his designs on Sigma. He was already the top shareholder through his entities, but his latest purchases — 224,000 shares on April 12 and 13 at an average of $5.64 each — pushed his stake up to nearly 10.7%, or four million shares.
Soros first disclosed owning shares in Sigma last summer. By January, his stake had grown to 5.3% of the company, which makes system-on-chip (SoC) solutions for smart TVs and Internet of Things (IoT) devices.
Sigma shares hit an all-time high of $73 nearly a decade ago in late 2007. Since then, the stock has come down and fallen off the radars of even the most tech-savvy investors. It last traded in the double digits in late 2015 and marked 2016 with a 5% drop for the year.
One can be forgiven for not being familiar with the name. It has a market cap of only $240 million and The Wall Street Journal search engine plaintively notes, “No significant news for SIGM in the past two years.”
Recent, less-significant news for Sigma hasn’t been good. In December, we said its revenue outlook “misses by a mile,” and the stock dove.
Sigma doesn’t seem to be an inspired investment choice. Yet those shares Soros acquired two weeks ago are already up 8.2% through Tuesday’s close as the tech bellwether Nasdaq Composite Index closed above 6,000 for the first time.
Owl Rock is a business development company, or BDC, launched last year and its shares don’t trade publicly. It is headed by alums of Goldman Sachs Group (GS), Blackstone Group (BX) and KKR (KKR) and was formed “primarily to make loans to, and make debt and equity investments in, U.S. middle market companies.” Investors include Soros, Regents of the University of California, Michael Dell of Dell Technologies (DVMT) and Brown University.
Soros sold more than 5.2 million Owl Rock shares on April 17 at $15.09 each. It is the first sale on record by any of the firm’s shareholders. Maybe Soros doesn’t see enough upside in this area of lending and debt in the Trump era.
Owl Rock shares are nonpublic restricted securities, and a shareholder requires the firm’s permission to sell, transfer or otherwise dispose of them. On the same day that Soros sold, the University of California acquired an additional 4.5 million Owl Rock shares at $15.09 each. It isn’t clear if Soros and the University of California transacted directly or through Owl Rock.
The University of California declined to comment. Soros and Owl Rock didn’t respond to requests for comment.
The University of California is the top shareholder in Owl Rock, now with a commanding 23% stake, or more than 10.6 million shares.
Owl Rock doesn’t have a time frame on when or if it will go public, but according to regulatory filings, the company expects “the primary means by which we exit our debt investments” will be through an acquisition or by an initial public offering, among other outcomes.
Soros entities had purchased more than five million Owl Rock shares for $14.30 each in June 2016, so he likely made money on the recent sale. He now holds less than half a million Owl Rock shares.
On his personal website, Soros writes of himself, “He has been known to emphasize the importance of tackling losing causes.” That certainly doesn’t apply to his investments if he can help it.