Tiger Global Management invested $50 million in Automatic, a blogging site, web developer and the parent company of Word Press. Matthew Mullenweg, founder of the company broke out the news regarding the new investment in his blog.
Tiger Global Secondary Transaction In Automatic Stock
According to Mullenweg, Tiger Global made a secondary transaction in Automatic stock. He said, “There has been a large secondary transaction in Automatic stock, about $50M worth. “Secondary” means that it’s existing stockholders, like the earliest investors or employees, selling stock to another investor versus money going into the company (“primary”).”
Mullenweg said that Lee Fixel, one of the silent genius investors of Tiger Global, initiated the investment in Automatic who also previously invested in SurveyMonkey, Facebook Inc (NASDAQ:FB), Linkedln Corp (NYSE:LNKD), Palantir Square, and Warby Parker.
“Automatic is healthy, generating cash and already growing as fast as it can so there’s no need for the company to raise money directly — we’re not capital constrained. The minority of stockholders that elected to participate are holding on to the vast majority of their shares. We’re building an independent company that’s going to be a growing part of the fabric of the web for many years to come, so allowing early investors to lock in some returns releases any short-term pressure there might be on the company for a liquidity event and allows us to focus fully on the long road ahead,” wrote Mullenweg.
Last March, Tiger Global also acquired Cabone, a global daily deals website based in Dubai. Cabone did not disclose the amount of capital infused by the firm’s private equity business, but it indicated that the investment will help the company in expanding its operation.
“Tiger Global gives us the international clout and the financial resources to expand regionally and surpass already high customer expectations,” stated Paul Kenny, founder of Cabone.
On the other hand, Tiger Global’s hedge fund closed out its position in gun maker Sturm, Ruger & Company (NYSE:RGR) as people criticized the gun industry and demanded stricter gun control regulations after the tragic shooting at Sandy Hook Elementary School that killed more than 2 dozen people including children. Tiger Global exited its 4.2 percent stake of 800,000 shares in the gun maker.
Coleman, one of the protégées of legendary investor Julian Robertson, generated outstanding returns from his investments in Apple Inc. (NASDAQ:AAPL), Amazon.com, Inc (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), and Google Inc (NASDAQ:GOOG).
Note (5/24/2013): The article was amended to reflect that Tiger Global Management’s private equity arm has invested in Automatic and Cabone. A previous version said that the firm’s hedge fund business had made the investments.