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Here’s Why Argosy Investors Sold its JD.com (JD) Shares

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  • JD

Argosy Investors, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. For the third quarter of 2021, the fund's year-to-date 2021 performance was 17.1% in select accounts, while S&P 500 by comparison returned 15.9% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Argosy Investors, in its Q3 2021 investor letter, mentioned JD.com, Inc. (NASDAQ: JD) and discussed its stance on the firm. JD.com, Inc. is a Beijing, China-based e-commerce company with a $146.6 billion market capitalization. GOOG delivered a 1.77% return since the beginning of the year, while its 12-month returns are down by -0.40%. The stock closed at $89.46 per share on November 23, 2021.

Here is what Argosy Investors has to say about JD.com, Inc. in its Q3 2021 investor letter:

"We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD's long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive."

Top 10 Online Shopping Sites in the US
Top 10 Online Shopping Sites in the US

Based on our calculations, JD.com, Inc. (NASDAQ: JD) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. JD was in 66 hedge fund portfolios at the end of the third quarter of 2021, compared to 76 funds in the previous quarter. JD.com, Inc. (NASDAQ: JD) delivered a 30.32% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.