Hedge fund manager Dan Loeb has sold his entire stake in Snap and bought more Facebook stock, adding pressure to the owner of Snapchat after a worse than expected earnings report this week.
Third Capital, Mr Loeb’s hedge fund, reported in a filing on Friday that it had no Snap holdings at the end of June, after having 2.25m shares in the messaging app owner in at the end of the first quarter.
If Mr Loeb bought the stake in the initial public offering at the beginning of March, it would have cost $38m. The shares began to slide below the IPO price of $17 after the end of the second quarter, so Mr Loeb would not have made a loss.
Neither Snap nor Third Point responded to requests to comment.
Snap’s stock fell below its IPO of $17 in July and fell 14.1 per cent on Friday to $11.83. The owner of Snapchat, an app most famous for its disappearing photo messages, has disappointed investors in both of its first two quarters as a public company.
Third Capital also reported that it had increased its stake in Facebook by 500,000 shares to 3.5m shares from the first quarter to the second quarter. Its new stake is worth $588m at Friday’s share price.
Shares in Facebook have soared 46 per cent so far this year as the world’s largest social network has beaten expectations. Advertisers have flocked to reach its audience of more than 2bn monthly active users.
Facebook has copied Snapchat’s Stories, a collection of photos that last 24 hours, replicating the feature in its four main apps to try to see off any threat from Snapchat. It has had particular success with Stories in Instagram and WhatsApp, where the features each now have 250m daily active users, more than Snap’s 173m.
Evan Spiegel, Snap chief executive, and co-founder Bobby Murphy pledged this week not to sell any more of their 400m shares this year. But the second lock-up period ends next week, enabling some employees to sell their stock into the market, and the board and the founders are allowed to sell their shares from the end of the month.
Third Point also sold its shares in Salesforce, up 29 per cent so far this year, and chipmaker Qualcomm, which is down 20 per cent.