Hedge Fund Tiger Global Continues Selling Longtop Financial Technologies (LFT) ~ market folly

Tuesday, October 27, 2009

Hedge Fund Tiger Global Continues Selling Longtop Financial Technologies (LFT)

In an amended 13D filed with the SEC, Chase Coleman's hedge fund Tiger Global has disclosed a 5.0% ownership stake in Longtop Financial Technologies (LFT) with 2,540,566 shares. The filing was made due to activity on October 15th, 2009 and marks the fact that Tiger continues to sell shares of this name. We've been covering their sales for quite some time now, most recently with their late September sales of LFT.

Just a month ago, they had a 6.8% ownership stake and now they are down to an even 5.0%. And, in the past, their stake had been as high as 14%. While their filing says they own 5% of shares at the top, you have to dig into the footnotes to see that in reality, Tiger ceased being a 5% owner of LFT on October 20th, 2009. Hedge funds and financial institutions are not required to disclose or update their stakes in companies unless they hold a 5% or greater stake. Once Tiger fell below that level, they didn't need to update any further with the SEC. We will no longer see updates from them regarding this position unless they bring it back up to a 5% stake. But for all intents and purposes, they have been selling this one for many months now.

Chase Coleman's hedge fund sold shares on October 14, 15, 19, and 20 at prices ranging from $30.15 to $30.21 per share. Here is the table taken directly from the SEC filing:

(click to enlarge)

Tiger Global has seen an average return of 47% from 2001-2007 and in 2007 they returned as high as 70%. You can replicate Tiger's success by investing in the Tiger Cub Portfolio created with Alphaclone where you can replicate their positions and enjoy 15.5% annualized returns since 2000. A fun fact about fund manager Chase Coleman is that he is a descendant of Peter Stuyvesant, the man who built the wall that gave Wall Street its name. Clearly, he was born for this. For more on Coleman and Tiger Global, check out their background and focus in the middle of the linked post.
Taken from Google Finance, Longtop Financial Technologies "provides a range of software solutions and services to the financial institutions in the People’s Republic of China (PRC), including the development, licensing and support of software solutions, the provision of maintenance, support, and other services, and system integration services related to the procurement and sale of third party hardware and software. The software solutions provided by the Company are classified into four categories: channel, business, management and business solutions."

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