Filings show using previous options for Elliott Management Nvidia. Paul Singer’s Firm had “at least $600 million downside exposure” to chipmakers, Elliott said last year that Nvidia was a “bubble,” nvidia was a “bubble,” and AI was “exaggerated.”
Elliott’s management placed a big bet on Nvidia after telling clients that chipmaker stock was in the “bubble” and artificial intelligence was “exaggerated.”
The billionaire investor Paul Singer’s company purchased last quarter put options of 1.45 million NVIDIA shares at a conceptual value of approximately $195 million as of December 31.
The activist investment specialist is the Invesco QQQ ETF, which tracks the Nasdaq-100 index, and also owns the owner worth a conceptual $1.1 billion. Additionally, the SPDR S&P 500 ETF Trust, following the S&P 500 Index, is worth an estimated $4.2 billion. Nvidia is the second largest component of both indexes after Apple.
Between three short positions, Elliott “exposed at least $600 million downside exposure to Nvidia” at the end of December, saying that he “directly or indirectly” the head of UBS’s European equity strategy Gerry Fowler, who spoke to Business Insider.
Elliott, who manages roughly $70 billion in assets, appears to have “specifically shortened NVIDIA through put options,” to hedge the risks of strengths such as Southwest Airlines and Pinterest. , appears to be hedging the largest US companies more widely.
However, Fowler emphasized that the strike price and maturity of the putt has not been revealed, saying, “The cost of this protection can be very low or high.
In a client’s letter obtained by Financial Times last year, Elliott’s boss said Nvidia and other large-scale high-tech stocks are in “Bubblelands,” asking whether massive demand for Nvidia’s graphics chips will continue. I questioned it.
They also predicted that some AI applications are always doomed to be too expensive, functioning, consume too much energy, or betray the trust of users.
Elliott has only disclosed Nvidia’s status once, according to an SEC declaration dating back to 2001. At the end of March 2024, I owned 5,000 shares worth $4.5 million, but sold within three months.
Nvidia’s shares have remained pretty flat this year after just over 100% in the past 12 months, worth $3.45 trillion.
Elliott’s US equity portfolio was worth around $9 billion at the end of December, excluding options and convertible debt securities. That top position included Triple Flag Precious Metals and $2 billion stake in Southwest Airlines and a $1.8 billion position in Suncor Energy.
It is worth highlighting that Form 13FS will provide a snapshot of the company’s US stock holdings in one day, about six weeks prior to its release. Stocks also exclude the sale of short stocks in private companies, assets on foreigners lists, and non-stock assets such as gold and real estate. This means that it doesn’t always draw the big picture of an investor strategy.
Elliot declined to comment.
