Canada markets open in 2 hours 58 minutes
  • S&P/TSX

    +195.41 (+1.03%)
  • S&P 500

    -11.63 (-0.30%)
  • DOW

    -62.42 (-0.20%)

    +0.0026 (+0.34%)

    +1.93 (+1.76%)

    -667.75 (-2.41%)
  • CMC Crypto 200

    -2.18 (-0.47%)

    +1.60 (+0.09%)
  • RUSSELL 2000

    +6.01 (+0.34%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • NASDAQ futures

    +49.75 (+0.41%)

    -0.19 (-0.70%)
  • FTSE

    +80.79 (+1.11%)
  • NIKKEI 225

    +178.20 (+0.66%)

    +0.0021 (+0.29%)

Meta Bet Scrapped at Brazil Money Manager on TikTok Threat

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- One of Brazil’s oldest independent asset managers said it closed a years-old wager on Meta Platforms Inc. about four months ago, citing the impact of competition from video-sharing app TikTok.

Most Read from Bloomberg

“The competition for time became fiercer given TikTok’s incredible ability to retain user attention,” IP Capital Partners wrote in a note to clients this month announcing the move. “While the short-form video format has had more success among young people, we believe it has a universal appeal and will continue to penetrate older audiences around the world.”

IP Capital Partners, which was founded in 1988, had more than 4 billion reais ($772 million) in assets as of April, according to data from Brazil’s capital-markets association Anbima. The firm, which didn’t disclose the size of the Meta position, said in emailed comments that it closed the trade in early February.

The money manager, which started building a long position in Meta in 2018, estimates that the US audience spent more time watching TikTok than Reels, the short video platform of Meta unit Instagram, by a magnitude of 20 in the first three months of the year.

While Meta has focused on boosting the adoption of Reels, the effort diverts attention from highly monetized features on its Facebook platform, such as the feed and stories, which helps explain a sharp slowdown in revenue growth last year, the fund wrote.

Wall Street has soured on Meta this year, with the stock losing more than half its value, erasing about $500 billion in market valuation. Much of the collapse occurred in February, when the company gave a forecast that disappointed investors and warned about competition from TikTok. Last year, it announced a pivot toward the metaverse, a change in strategy that investors remain mixed on.

The Rio de Janeiro-based asset manager’s oldest fund, IP Participacoes Master FIA BDR Nivel I, had exposure to Meta through both U.S.-listed shares and the company’s Brazilian depositary receipts, data compiled by Bloomberg show. Other U.S. bets include Netflix Inc., Charter Communications Inc., Charles Schwab Corp. and Inc., according to the note to clients.

(Adds IP Capital comments in third paragraph.)

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting