Li Lu, investor and philanthropist once dubbed “the Chinese Warren Buffett” by Charlie Munger, has just disclosed a bold stock move.
According to his 13F filing on Thursday, August 14, the founder and chairman of Himalaya Capital appears to be betting everything on just PDD Holdings (NASDAQ: PDD), also known as Pinduoduo and the parent company of Temu.
More precisely, Lu owns 4,608,000 shares in the Chinese online retailer, worth almost $500 million on June 30.
PDD Holdings stock price performance
PDD shares slipped 1.62% on Thursday. At press time on August 15, however, PD Holdings stock was up 1.18% in pre-market.
At Thursday’s close, PDD had a trading volume of 5,151,744 shares, below its average of 6,113,639. The stock has traded between $87.11 and $155.67 over the past 12 months and currently has a market capitalization of $159.79 billion.
The company’s latest quarterly earnings reports posted $1.37 earnings per share (EPS), falling short of the $2.25 consensus estimate. Revenue also failed to impress, coming in at $13.18 billion as opposed to the projected $103.37 billion.
Why is PDD stock fluctuating?
While Lu’s filings could have played a part, the short-term fluctuation is also likely the result of disappointing quarterly results and more general shifts in institutional activity. For example, the National Bank of Canada significantly reduced its stake in PDD Holdings, selling 785,691 shares and cutting its holdings by 73.4%.
On the other hand, Hollencrest Capital Management opened a new position worth $26,000, while OneDigital Investment Advisors LLC, Gunderson Capital Management, and First Affirmative Financial Network each opened new positions ranging from $204,000 to $218,000.
More notably, 3G Capital boosted its PDD holdings by 41.7%, now holding 425,000 shares, while backing out of its Amazon (NASDAQ: AMZN) position. Overall, institutional investors and hedge funds hold 39.83% of PDD’s outstanding shares.
In light of the ongoing market developments, analysts appear to have mixed opinions on PDD. Benchmark, for instance, lowered its target from $160 to $128 while maintaining a “Buy” rating, while JPMorgan reduced its target from $125 to $105 with a “Neutral” rating. However, Jefferies predicts a $121 target with a “Buy” rating.
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