Key Takeaways
- • Third Point hedge fund exited a 2.25 million share position in Snap during Q2 2016, liquidating the entire stake just one quarter after the initial purchase, according to SEC 13F filings.
- • Snap shares declined 33 percent during the quarter in which Loeb exited, following a temporary 21.5 percent bump in May when first-quarter hedge fund filings initially revealed Third Point's accumulation of the position.
- • Third Point simultaneously increased its Dow Chemical stake by 300,000 shares to 16 million shares during the same quarter, positioning for the planned DuPont merger and subsequent spinoff operations expected within 18 months.
- • The hedge fund reduced exposure to bank financials and "fading Trump Trade" reflationary positions in Q2, repositioning portfolio capital toward companies benefiting from low-inflation environments, per Loeb's investor letter.
- • Third Point dissolved its JPMorgan Chase position entirely while increasing Bank of America holdings by 1.5 million shares to 15 million shares, reflecting the firm's tactical shift within financial sector exposure.
Summary
Third Point, the hedge fund managed by billionaire activist investor Dan Loeb, executed a rapid exit from Snap during the second quarter of 2016, liquidating its entire 2.25 million share position just one quarter after the initial purchase. The timing proved unfavorable, with the social media platform's shares declining 33 percent during the period of Third Point's exit, according to SEC 13F regulatory filings disclosed on Friday.
The Snap investment had generated temporary momentum when Third Point's first-quarter accumulation became public knowledge. The announcement of Loeb's stake triggered a 21.5 percent rally in Snap shares during May 2016. However, subsequent developments undermined the position: Snap shares had already lost half their value since the March 2016 initial public offering, and the second quarter deteriorated further following expiration of the lockup period for early investors and disappointing earnings results.
Concurrent with the Snap liquidation, Third Point repositioned capital strategically elsewhere. The fund increased its Dow Chemical stake by 300,000 shares to 16 million total shares, positioning for the finalization of the Dow-DuPont merger scheduled for August 31, 2016, with planned spinoffs of combined company units anticipated within the subsequent 18 months. In May 2024, Third Point had submitted a presentation to Dow Chemical and DuPont management proposing structural modifications that could deliver an additional $20 billion in shareholder value.
More broadly, Third Point's Q2 moves reflected a fundamental portfolio repositioning away from what Loeb termed the "fading Trump Trade." In his second quarter investor letter, Loeb indicated the firm had reduced holdings in bank financials and exited reflationary macro positions, redirecting capital toward companies positioned to benefit from sustained low-inflation environments. This tactical shift included dissolving the JPMorgan Chase position entirely while simultaneously increasing Bank of America shares by 1.5 million to reach 15 million shares total. The divergent treatment of the two financial institutions underscored Third Point's selective approach within the sector during a period of broader financial repositioning.
The Snap investment had generated temporary momentum when Third Point's first-quarter accumulation became public knowledge. The announcement of Loeb's stake triggered a 21.5 percent rally in Snap shares during May 2016. However, subsequent developments undermined the position: Snap shares had already lost half their value since the March 2016 initial public offering, and the second quarter deteriorated further following expiration of the lockup period for early investors and disappointing earnings results.
Concurrent with the Snap liquidation, Third Point repositioned capital strategically elsewhere. The fund increased its Dow Chemical stake by 300,000 shares to 16 million total shares, positioning for the finalization of the Dow-DuPont merger scheduled for August 31, 2016, with planned spinoffs of combined company units anticipated within the subsequent 18 months. In May 2024, Third Point had submitted a presentation to Dow Chemical and DuPont management proposing structural modifications that could deliver an additional $20 billion in shareholder value.
More broadly, Third Point's Q2 moves reflected a fundamental portfolio repositioning away from what Loeb termed the "fading Trump Trade." In his second quarter investor letter, Loeb indicated the firm had reduced holdings in bank financials and exited reflationary macro positions, redirecting capital toward companies positioned to benefit from sustained low-inflation environments. This tactical shift included dissolving the JPMorgan Chase position entirely while simultaneously increasing Bank of America shares by 1.5 million to reach 15 million shares total. The divergent treatment of the two financial institutions underscored Third Point's selective approach within the sector during a period of broader financial repositioning.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.