(Bloomberg) — One of Brazil’s oldest independent asset managers said it closed a year-old bet on Meta Platforms Inc in the first half of 2022, citing the impact of competition from video-sharing app TikTok.
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“Competition for the time being intensifies given TikTok’s incredible ability to retain user attention,” IP Capital Partners wrote in a note to customers this month, announcing the move. “While the short-form video format has found greater success among younger people, we believe it has a universal appeal and will continue to penetrate older audiences around the world.”
IP Capital Partners, which was founded in 1988, had more than $4 billion ($777 million) in assets as of April, according to data from Brazil’s capital-market consortium Ambima. The firm did not disclose the size of the meta position in the note to customers, and did not immediately respond to an emailed request for comment.
The money manager, which began building a long position in Meta in 2018, estimates that US audiences spent more time watching TikTok than the short video platform reels on meta unit Instagram in the first three months of the year. ,
While Meta has focused on boosting adoption of the reels, the effort shifts attention away from the highly monetized features on its Facebook platform, such as feeds and stories, that helped explain the sharp slowdown in revenue growth last year. , wrote the fund.
Wall Street has soured on the meta this year, with the stock losing more than half its value, losing nearly $500 billion in market valuation. Much of the collapse happened in February, when the company delivered a forecast that disappointed investors and warned about competition from TikTok. Last year, it announced a pivot toward the Metaverse, a change in strategy on which investors remain mixed.
Data compiled by Bloomberg show, the oldest fund of the Rio de Janeiro-based asset manager, IP Participacos master FIA BDR Nivel I, was exposed to Meta through both US-listed shares and the company’s Brazilian depository receipts. Other US bets include Netflix Inc., Charter Communications Inc., Charles Schwab Corp. and Amazon.com Inc., according to the note to customers.
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