NEW YORK - One of the top-performing hedge funds of the year is betting that shares of International Business Machines Corp (IBM.N) have further to fall.
Glen Kacher, whose Light Street Capital hedge fund is up 53 percent this year through October, told the Reuters Global Investment 2018 Outlook Summit on Wednesday that Square Inc’s (SQ.N) technology could mean “trouble” for companies that draw revenue from lesser point-of-sale technology, such as IBM, VeriFone Systems Inc PAY.N and Ingenico Group SA (INGC.PA).
Kacher said he is shorting the stock of IBM, which is down 11.5 percent for the year to date. The shares are 32 percent below their peak price in March 2013.
Shares of Square Inc, run by Twitter Inc (TWTR.N) CEO Jack Dorsey, are up 197 percent for the year-to-date as the company expands its network of devices that allow small businesses to accept debit and credit cards using tablet computers or smart phones.
“What Square has done with their point-of-sale technology is off-the-charts stunning,” Kacher said. “The idea that the deli has better technology than Wal-Mart is stunning.”
Shares of IBM closed down 1.2 percent on Wednesday, a day after a regulatory filing showed that Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) reduced its stake in the company by 32 percent in the third quarter. Over the last year, Buffett has reduced his stake in IBM by 52 percent and now owns approximately 37 million shares.
Kacher, who manages approximately $1.1 billion, has his largest long positions in Amazon.com Inc (AMZN.O), Facebook Inc (FB.O), Momo Inc (MOMO.O) and Match Group Inc (MTCH.O), according to Light Street’s most recent filing.
Editing by Jennifer Ablan and Leslie Adler