University of California Increased Alibaba, Pinduoduo Stock Investments | Barron's Tech Companies

The University of California’s investments unit scooped up Alibaba and PInduoduo shares.

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A giant American university system greatly increased investments in two Chinese companies, and made other significant changes in its holdings.

The Regents of the University of California disclosed that its UC Investments unit boosted its holdings of the American depositary receipts of Chinese internet giant Alibaba Group Holding (ticker: BABA), and nearly tripled the investment in e-commerce firm Pinduoduo (PDD) ADRs in the third quarter. UC Investments also took a position in food-delivery service DoorDash (DASH), and halved its stake in Upstart Holdings (UPST), an artificial-intelligence lending platform.

The regents disclosed the changes in the stock holdings, among others, in a form it filed with the Securities and Exchange Commission. UC Investments didn’t respond to a request for comment. It manages the university system’s retirement, endowment, working capital, and cash assets, and the portfolio stands at $153 billion. An increase in the number of shares of an equity investment may reflect a donation of stock rather than an open-market purchase,.

UC Investments’ stake in Alibaba rose by 156,400 ADRs to 462,431 at the end of September. Alibaba ADRs slid about 37% in the first nine months of the year as investors have worried over increased regulatory scrutiny in China.

Alibaba has rallied so far in the fourth quarter, rising 11.4%, however. Earlier this month, the company unveiled its own chip to boost its cloud-computing services. Co-founder Jack Ma reportedly traveled to Europe in October, a sign that political and regulatory pressure on Alibaba was possibly easing. Prominent value investor Charlie Munger disclosed that his firm Daily Journal (DJCO) had doubled down on Alibaba ADRs in the third quarter.

For comparison, the S&P 500 index rose 15% in the first nine months of 2021. It is up 6.9% so far in the fourth quarter.

The University of California increased its stake in Pinduoduo by 37,102 ADRs to end the third quarter with 50,582 ADRs. Pinduoduo ADRs were halved in price in the first nine months of the year, but so far in the fourth quarter they have slipped 2%.

Pinduoduo has been prying market share away from Alibaba and JD.com (JD). Earlier this year, when Pinduoduo ADRs were already in double-digit losses for the year, we suggested an options play on the company.

DoorDash stock was hot earlier this year, surging 44% in the first nine months of 2021. So far in the fourth quarter, the shares have slid 5.4%.

DoorDash’s latest quarter showed a wider-than-expected loss, as loosened Covid-19 restrictions offering consumers more options for eating out, giving them less reason to order in. One consolation is that DoorDash, and others, seem to be taking market share away from Just Eat Takeaway.com
‘s (GRUB) Grubhub unit. In what may be a mixed bag for DoorDash, it has launched an advertising platform.

The university system bought 11,089 DoorDash shares in the third quarter. It didn’t own any at the end of the second.

The University of California sold 70,593 Upstart Holdings shares to end September with 78,438 shares. Upstart Holdings’ stock price rose eightfold in the first nine months of 2021, and so far in the fourth quarter, shares have gained 1.8%.

Upstart Holdings went public in December 2020. Billionaire investor Dan Loeb’s Third Point was an early investor in the company. This month, a money manager highlighted Upstart Holdings stock as one of three picks to play an economic recovery.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at [email protected] and follow @BarronsEdLin.

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