Chase Coleman's Tiger Global Reveals TAL Education (XRS) Stake ~ market folly

Friday, November 5, 2010

Chase Coleman's Tiger Global Reveals TAL Education (XRS) Stake

Chase Coleman's hedge fund Tiger Global has filed a 13D with the SEC regarding TAL Education (XRS). Per activity on October 25th, Tiger has disclosed a 51.2% ownership stake in TAL Education with 23,475,000 collective shares.

Their activist ownership stake is slightly complex as the majority of these shares are actually represented by Class B common shares which may be converted into Class A shares within 60 days of the filing date. They also own the new American Depositary Shares (ADR's) recently acquired in the initial public offering of ADR shares.

This is not a new position for the hedge fund, but it is the first time they've disclosed it and we'll get into that below. Tiger purchased shares of XRS (the ADR shares) in the IPO. TAL Education just IPO'd this month and shares have surged 50% to $15 after being priced at $10 each, at the higher end of its $8-10 per share range. Twelve million shares were offered, raising the company $120 million.

Tiger's ownership of TAL Education shares actually goes back to August 2009 as they purchased various Class B shares. They have not had to disclose a position in the company because it was traded in foreign markets and not in the United States. Now that the company has IPO'd its ADR shares in the US, Tiger has revealed the full extent of their stake and you can read all the fine print of their filing here.

In terms of other portfolio activity out of Coleman's hedge fund, we've detailed how Tiger Global has purchased a portfolio of web companies. Taken from Yahoo Finance, TAL Education "together with its subsidiaries, provides K-12 after-school tutoring services in the People's Republic of China."

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