Buffett's friend at Daily Journal halves Alibaba's stake as stock slump hits US$212 million portfolio
Daily Journal Corp, a publishing and software business overseen by Warren Buffett's business partner Charlie Munger, halved its stake in Chinese e-commerce group Alibaba Group Holding last quarter as the value plunged.
The firm reported a holding of 300,000 depositary shares worth US$32.6 million in its first-quarter 13F report, according to a US regulatory filing on Monday. It had 602,060 shares on December 31, then valued at US$71.5 million.
Munger is Daily Journal's chairman and oversees its investment portfolio, in addition to his role as a vice-chairman at Berkshire Hathaway. The publisher first unveiled a position in Alibaba in the first quarter of 2021, with a stake of 165,320 shares worth US$37.5 million or US$227.63 each on average. It last traded at US$101.11 in after-hours trading.
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The sale underscores the difficulty in determining the floor for Chinese tech stocks more than a year after Beijing's unprecedented regulatory crackdown on internet-platform operators. Money managers continue to be wrong-footed by challenges to earnings amid China's uncompromising zero-Covid strategy and citywide lockdowns.
Los Angeles-based Daily Journal announced in March that the 98-year-old billionaire would step down, while keeping his board seat "to pay particular attention to matters with which he has been involved in the past, including the company's securities portfolio", according to its filing.
Daily Journal is known for its collection of newspapers and for selling software to customers that include justice agencies and courts. The business also holds a collection of stocks in addition to its operating businesses.
The size of its investment portfolio fell to US$212.6 million on March 31 from US$258.7 million on December 31, mainly in shares of Bank of America and Wells Fargo.
Munger declined to comment on the Alibaba stake, his assistant said. Alibaba's ADRs slumped almost 50 per cent in 2021, and another 14 per cent this year.
Additional reporting by Bloomberg and Reuters
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