Raging Capital Management had its best month ever in July, with its Raging Capital Master Fund gaining 22 percent net fees and expenses, almost entirely on the back of Facebook Inc (NASDAQ:FB)’s recent rally, Opalesque reports. Many investors had been wary of Facebook which had been struggling to move its online dominance to the mobile space, but its stock has soared in the last month as it has convinced analysts that it has a solid plan for long-term growth.
Raging Capital had a fine month without Facebook Inc (NASDAQ:FB), the rest of its portfolio gained 5 percent compared to the overall markets 4.95 percent return, but the other 80 percent of its gains came from Facebook. This could just be a case of a fund manager being in the right place at the right time, but Raging Capital Chairman William Martin says that his company knew something was changing over at Facebook and seized the opportunity.
GrizzlyRock Value Partners was up 16.6% for the first quarter, compared to the S&P 500's 5.77% gain and the Russell 2000's 12.44% return. GrizzlyRock's long return was 22.3% gross, while its short return was -2.9% gross. Compared to the Russell 2000, the fund's long portfolio delivered alpha of 10.8%, while its short portfolio delivered alpha Read More
Raging Capital springs on Facebook Inc (NASDAQ:FB) News Feed developments
“Anyone who uses FB, of which there are about 1.1 billion users, could have detected that News Feed advertising was becoming visually more prominent and engaging and that both ad loads and the volume of unique advertisers were rapidly increasing in the second quarter,” said Martin. “All we did was match this observation against proprietary survey work, dozens of due diligence calls, and meetings with industry participants.”
Raging Capital picks up 300,000 shares of Facebook Inc (NASDAQ:FB)
Martin told investors that he wasn’t afraid to be ‘position-maxed’ when the right opportunity presented itself, and he felt that the change in Facebook advertising methodology was just such an opportunity. According to a recent filing, Raging Capital took on 300,000 shares of Facebook. While this only accounted for 1.7 percent of the entire portfolio by value, Raging Capital normally focuses on long-term value investments that are less likely to show the kind of explosive growth that Facebook just had.
It shouldn’t be much surprise that Martin was the one to spot Facebook Inc (NASDAQ:FB)’s potential. He got his start during the dot-com era, and even before he moved in on Facebook about a third of the Raging Capital Master Fund was invested in the technology sector, with healthcare, basic materials, and energy investments rounding out most of the rest of the portfolio.