Ole Andreas Halvorsen’s Viking Global bought two big second-half turnaround stories in the third quarter. The Norwegian-American billionaire’s hedge fund opened positions in Starbucks and Tesla sometime in the three months ended September 30, the latest regulatory filings show. Those bets – worth more than $100 million each – appear to be paying off, as both companies have rebounded recently. Halvorsen purchased nearly 1.7 million Starbucks stores during the quarter, valued at $162 million. The coffee chain hired Brian Niccol from Chipotle in August and began serving as its new CEO in September. The appointment gives investors hope that Starbucks can solve the problems plaguing its business. On the day the news was announced, Starbucks’ stock price soared more than 24%, marking its best day ever. Almost all of Starbucks’ more than 25% rise in the third quarter came from this increase. Shares are up less than 1% so far in the fourth quarter. (By comparison, the S&P 500 is up nearly 2% for the quarter.) Despite the big swing on one day in August, Starbucks shares are still up about 2.5% in 2024, trailing the S&P 500 The index rose by approximately 23%. Analysts surveyed by London Stock Exchange Group (LSEG) have an average buy rating, with a price target suggesting the stock will rise less than 2% over the next year. Tesla’s rebound Tesla’s resurgence revolves around the world’s richest man, Chief Executive Elon Musk, who this summer emerged as President-elect Donald Trump’s most prominent supporter of the White House. Musk subsequently donated approximately $200 million to Trump’s campaign, supported the Daily Republican on social media and attended campaign rallies. Trump this week tapped Musk to co-lead an office focused on government efficiency. Tesla’s stock price soared more than 32% in the third quarter and is up nearly 23% so far in the fourth quarter. Although Tesla fell 29% in the first quarter of this year, the electric car maker is now up 29% in 2024. The price target implies a drop of more than 28% from 2024. Still, analysts generally rate Tesla as a Buy. TSLA SBUX YTD Mountain Tesla and Starbucks, to be sure, are relatively small positions so far this year for Halvorson, a fellow Tiger Management alumnus of the late Julian Robertson. For example, Viking Global’s stake in US Bancorp, Halvorsen’s largest single holding, grew by more than 32% in the third quarter and was worth more than $1.5 billion at the end of the quarter. Other stocks Halvorsen took positions in during the second quarter include Visa, Charles Schwab and Bank of America. Viking Global’s stocks sold off during the quarter included Meta Platforms, Dollar Tree and UnitedHealth.
