News: Buying Alibaba Stock Was a ‘Mistake,’ Al Gore’s Firm Says

Al Gore's investment firm, Generation Investment Management, recently made significant changes to its investment portfolio. In the first quarter, the firm sold its entire investment in Chinese online giant Alibaba Group Holding. At the same time, Generation acquired shares of software giant Microsoft and chip maker Texas Instruments. Additionally, they initiated an investment in Korean e-commerce firm Coupang during the quarter. The details of these stock trades were disclosed in a filing with the Securities and Exchange Commission.

Generation, chaired by Al Gore, chose not to comment on these investment changes. As of the end of the first quarter, the firm's assets under management and supervision amounted to approximately $42.7 billion.

While Alibaba's American depositary receipts (ADRs) experienced a 16% rise in the first quarter, outperforming the 7% increase in the S&P 500, the ADRs dropped by 19% in the second quarter, while the index remained flat.

At the end of 2022, Generation owned 3.7 million Alibaba ADRs but sold them all during the first quarter. Despite avoiding the decline in the second quarter, Generation's managers viewed their investment in Alibaba unfavorably. In an investor letter, Generation's co-Chief Investment Officers, Miguel Nogales and Mark Ferguson, acknowledged their "mistake rate" and included their investments in Alibaba and IndusInd Bank, both of which have now been sold, in that category.

Nogales and Ferguson expressed positive sentiments about Microsoft, aligning with Generation's focus on environmental, social, and governance (ESG) factors. They highlighted the energy and carbon efficiency of Microsoft's cloud-computing platform Azure, stating that it contributes to the fight against climate change.

During the first quarter, Generation increased its stake in Microsoft by purchasing an additional 1.1 million shares, bringing their total investment to 5.2 million shares. Microsoft stock experienced a 20% gain in the first quarter and has seen a 9.4% increase thus far in the second quarter.

Regarding Texas Instruments, Generation purchased 1.6 million shares, increasing its holdings to 4.3 million shares by the end of March. Texas Instruments reported a strong first quarter but provided an outlook that fell short of Wall Street's expectations. The company had previously announced plans to build a new facility in Utah to expand its capacity. In the first quarter, Texas Instruments stock gained 13%, but in the second quarter, shares declined by 8.7%.

Lastly, Generation acquired 491,844 shares of Coupang, an Asian e-commerce company, in the first quarter. This move represents a reversal of their previous course, as they had sold all their Coupang shares by the end of the fourth quarter of 2022. In the first quarter, Coupang's stock increased by 8.8%, while in the second quarter, shares decreased by 1.7%.