Technology magnate Donald Yacktman will start trading a series of call options in key technology stocks — including Amazon, Facebook, Netflix and Google — on June 11.
The $180 million bet over time includes options on Amazon, Netflix, Google and Twitter. It’s not certain what the cash yields will be. But the arrangement comes amid a sell-off in technology stocks. The Nasdaq composite index is off 15% since a high point in March.
Since the market sell-off in late April, a Tech Wrap podcast (listen below) spoke with Yacktman about his investments. He’s been an activist investor since 1996, when he started OGE Energy, an Oklahoma-based utility. He’s known as a value investor — historically, one who has successfully taken stakes in industries or companies that analysts expected to underperform and pushed for changes. In recent years, Yacktman has focused on social media. Yacktman is a fellow of the Society of American Business Editors and Writers.
“Usually we’re value-oriented investors,” Yacktman told Money Pulse. But he sees potential in some of the high-flying tech stocks like Netflix and Amazon that he’s gotten into. “To me, there is evidence that there is more inflation priced in than meets the eye.” Yacktman said he plans to follow up with a report in late summer on the performance of the options.
The investment is by Sterling Capital Management, an investment management firm based in Chicago. It manages more than $7 billion. It has invested in the social media companies at least once before. This time, Sterling has decided to bet on the stock options in just a few of the companies, rather than building a portfolio of all five. After viewing its recent activity in options trading, Sterling decided to pursue the strategy, according to research firm IHS Markit.
Donald Yacktman is the founder and president of Yacktman Capital, based in Austin, Texas. He has a net worth of $3.1 billion according to the Bloomberg Billionaires Index. He has previously made similar bets on the stocks of Petrobras and SunEdison. He is a member of the Forbes 400.