Fidelity Funds Purchase 2.4M Twitter Shares
Mutual funds run by Fidelity Investments bought a modest 2.4 million shares of Twitter Inc (NYSE:TWTR) in the days after its public debut, revealing that they were not willing to take any early, big bets on the microblogging site.
Fidelity's Contrafund led the way, holding 1.1 million shares at the end of November, according to the latest available fund disclosures. That stake was worth $73 million on Monday, a small bet for a fund with net assets of $109 billion.
In contrast, Contrafund's stake in Facebook Inc was worth $1.6 billion at the end of November. Some analysts say Twitter may lose out to Facebook and Google Inc in the battle for online ad revenue.
In all, nearly 30 Fidelity funds bought Twitter shares, according to data from Fidelity and Lipper Inc, a Thomson Reuters company. Fidelity declined to comment.
Twitter stock is up 155 percent over its November 7 initial public offering price of $26 per share. But investors are debating whether it will become just a social media niche or achieve the giant status of Facebook.
The stock fell 4 percent on Monday to a close of $66.29 after analysts at Morgan Stanley downgraded Twitter to "under weight" from "equal weight" and questioned how much online ad revenue it would collect in relation to Facebook and Google.
Nevertheless, Twitter's stock market value is a frothy $37 billion, despite being a money-losing operation. And U.S. mutual funds are sitting on some handsome gains since the IPO.
T. Rowe Price Group Inc's New Horizons Fund bought 4.6 million Twitter shares for $2.66 apiece before the IPO. Assuming that position hasn't changed, those shares were worth $305 million on Monday, reflecting a 25-fold gain. Year-end holdings for the fund should be available within two weeks, according to T. Rowe Price spokeswoman Heather McDonold.
Fidelity funds also appear to be in good position. Twitter's stock is up 59 percent since November 29, the effective date for Fidelity's latest reports for mutual fund holdings.
(Reporting By Tim McLaughlin; Editing by Richard Valdmanis and Jonathan Oatis)