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Tiger Global Management, LLC, is a fundamentally oriented global investment firm. The firm deploys capital in two businesses—private equity partnerships and public equity funds. Tiger Global’s private equity partnerships have ten-year horizons and invest in growth companies in the global Internet and technology sectors. The firm’s public equity funds focus on long-term trends in the technology, telecom, media, retail, and consumer sectors. For public and private equity investments, the firm invests across the globe with a focus on the United States, China, India, Southeast Asia, Latin America, and Eastern Europe. The New York–based Tiger Global was founded in 2001, and it has about $6 billion in assets under management.
Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).
In this six-part series, we’ll go through some of the main positions Tiger Global Management traded this past quarter.
Tiger Global started new positions in Yahoo Inc. (YHOO), Liberty Ventures (LINTA), SodaStream International Ltd. (SODA), and TripAdvisor Inc. (TRIP) and it sold Sinclair Broadcast Group (SBGI) and QUALCOMM Inc. (QCOM).
Why sell QUALCOMM Inc. (QCOM)?
Qualcomm announced positive earnings and revenue, but shares fell after the result due to management’s cautious outlook. Revenues were up 33% year-over-year and 4% sequentially, to $6.48 billion. Diluted earnings per share were up 18%, to $0.86 year-over-year.
In fiscal 2013, Qualcomm Technology Licensing (QTL) delivered record revenues and earnings up 19% and 18% year-over-year, respectively, driven by greater-than-expected 3G and 4G device shipments and increased ASPs reported by its license fees. Qualcomm CDMA Technologies (QCT) also grew significantly in fiscal 2013, delivering record revenues and earnings, up 38% and 39% year-over-year, respectively, driven by successful share in content gains. The company continued to lead in LTE chipsets with its integrated modem solutions and delivered significant product enhancements across all key technology vectors, including modem, processor, graphics, and connectivity.
The company said it has grown revenues at a compound annual rate of more than 30% over the last three years. Going forward for the next five years, it expects revenues and earnings per share will grow at double-digit compound annual growth rates. It expects to repurchase a minimum of $4 billion of stock in fiscal 2014.
For fiscal 2014, it said it expects solid growth, but at a lower rate compared to the last two years. It estimates fiscal 2014 revenues to be in the range of approximately $26 billion to $27.5 billion, up 5% to 11% year-over-year. The company expects QCT growth in fiscal 2014 to reflect strong end-market demand somewhat mitigated by the effects of OEM concentration at the high tier. QCT growth in fiscal 2014 is aligned with the growth trends in the top-tier OEMs and much of the medium-tier smartphone accounts. It’s seeing continued high OEM share concentration—particularly at the higher end of the smartphone market—and this impacts its product mix as well as its revenues and related operating margin. It expects QCT operating margin to be up sequentially and in the range of 17% to 19%. It faces competition in the chipset market from Intel (INTC), Broadcom Corp. (BRCM), and Nvidia Corp. (NVDA).
Tiger Management Corp., also known as “The Tiger Fund,” was a hedge fund founded by Julian Robertson. The fund began investing in 1980 and closed in March 2000. After closing his Tiger Fund in 2000, Robertson used his own capital to support and finance upcoming hedge fund managers. One of the seeded funds is Tiger Global Management LLC, which was set up with managing partner Charles “Chase” Payson Coleman III. The fund is co-managed by Feroz Dewan.
According to a Bloomberg article, “Tiger cub” Chase Coleman is a descendent of Peter Stuyvesant, the last Dutch governor of New York. He graduated from Williams College and worked as a technology analyst for Robertson at Tiger Management LLC. Coleman initially named his fund “Tiger Technology Management,” later changed to Tiger Global.