- Carl Icahn, Dan Loeb, and David Einhorn built sizeable stakes in Twitter last quarter.
- Paul Tudor Jones also grew his Twitter stake from $411,000 to $42 million in the period.
- They were likely betting that Elon Musk would ultimately buy Twitter, and were proven right.
Several elite investors wagered Elon Musk would ultimately buy Twitter despite his protests, and likely made a tidy profit once the deal closed in late October.
Carl Icahn, David Einhorn, Dan Loeb, and Paul Tudor Jones' respective funds all plowed significant sums into the social-media company's stock last quarter, Securities and Exchange Commission filings showed on Monday.
Icahn and his team amassed 12.5 million Twitter shares, valued at $549 million on September 30. The billionaire investor and Icahn Enterprises chairman recently disclosed he bought the stock in the $30 range, well below Musk's offer of $54.20.
Assuming an average cost per share of $35, Icahn potentially spent $440 million on shares he sold to the Tesla and SpaceX CEO for $679 million, meaning he pocketed $239 million — a 54% return in a matter of months.
Similarly, Einhorn's Greenlight Capital scooped up 4.3 million shares, worth $188 million at the end of last quarter. The hedge fund manager told his clients in August that his average cost per share was $37.24, Reuters reported.
If Einhorn built the entire position at that price, it would have cost $160 million. Assuming he sold the entire stake at Musk's buyout price, Greenlight received $232 million — a $72 million profit.
Loeb's Third Point also established a sizeable stake in Twitter last quarter. It snapped up 5.5 million shares worth $241 million on September 30. That stake was worth $50 million more by October 27, when Musk bought the company.
Meanwhile, Jones' Tudor Investment Corp. boosted its Twitter holdings from 11,000 shares worth $411,000, to 948,000 shares $42 million. It also purchased bullish call options on 34,000 shares, and bearish put options on 1.1 million shares.
Setting the options aside, the fund's stake likely surged in value to $51 million in the space of a month, thanks to Musk completing his takeover.
Another top fund appears to have missed out on a major windfall. Jim Simons' Renaissance Technologies slashed its Twitter stake from 2.5 million shares worth $94 million at the end of June, to 248,000 shares valued below $11 million at the end of September.
RenTech's original stake would have been worth $136 million by the time of Musk's buyout, representing a $42 million or 45% profit. That dwarfs the $13 million value of its reduced position once the deal closed.
Musk's attempts to renege on his Twitter purchase weighed on the company's stock this year, as investors feared he would succeed and the shares would slump to their pre-offer levels. It seems that several shrewd fund managers were confident Musk wouldn't be able to walk away, and felt comfortable betting tens or hundreds of millions of dollars they were right.