When America’s richest men move their stakes, people pay attention. Carl Icahn buys Apple Inc. (AAPL) , Warren Buffett buys DaVita HealthCare (DVA) ,and the world pays attention. What hasn’t gotten as much press is the recent portfolio restructuring of Russia’ richest man, tech maverick Alisher Usmanov. Since last year, Usmanov has been unloading nearly all of his American tech holdings, including his Apple holdings and his major stake in Facebook Inc. (FB) .
When Icahn and Buffett buy long, we trust they know something we don’t. These men are wll-known American investors, prized for their ability to sniff out value. But if we’re using net worth as a gauge of investing acumen, we must pay attention to Usmanov’s bearish outlook on American tech. What does he know that we don’t?
If Usmanov’s portfolio has a thesis, it would be “growth is not in the US.” While he’s been pulling out of Facebook and Apple, he’s been doubling down on “China’s Amazon (AMZN) ” Alibaba, and Russian social media plays.
This makes sense, as China and Russia represent the fastest-growing markets for social media. And in Russia, where Usmanov is not bogged down by pesky antitrust laws, there is little to stop him from exerting total control over the Russian tech sphere. He is already the co-owner of Russia’ largest e-mail provider (Mail.ru) and is also the majority holder of VK and Odnoklassniki, its two largest social media companies.
While Facebook is making great strides in emerging market growth and strengthening their advertising revenue, they have failed to make a dent in Russia (where they are a distant fourth). And their presence in China is nonexistent, having been blocked in the entire country since July 2009 by what is dubbed “The Great Firewall of China.”
Likewise, Apple has had trouble really making a dent in the Chinese smartphone market, with the emerging market-targeted 5C doing well but not spectacularly so, and a much-ballyhooed partnership with China Mobile (CHL) in January has not energized the company's stock as much as investors had hoped.
So rather than continue betting on American companies that are failing to make headway in China or Russia, Usmanov is betting on companies with an already established major presence in those markets. He made a hefty profit on both Apple and Facebook, but it appears his faith in American tech to continue growing – that is, break into Russia or China – has completely come to an end.
But while American tech might not be breaking into China, Chinese tech is breaking into America. On Mar. 17 Alibaba, with a rumored valuation around $153 billion, picked the US for its IPO. The offering is expected to be the largest tech IPO in America… since Facebook.
And if it goes as well as expected, Usmanov will make hundreds of millions. And then people will really have to pay attention.
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