An AMC box office.
Jeenah Moon/Bloomberg
The largest public pension in America loaded up a high-profile meme stock, and tech stocks, and cut back on a streaming giant before the shares went on their latest plunge.
California Public Employees’ Retirement System bought more shares of movie-theater chain AMC Entertainment Holdings (ticker: AMC), chip maker Advanced Micro Devices ( AMD
), and Square parent Block (SQ), and slashed its investment in Netflix (NFLX) in the first quarter.
Calpers, as the pension is known, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
The pension declined to comment on the investment changes. It manages $450 billion in assets, more than any other public pension in the U.S.
Calpers bought 155,992 AMC shares to end the first quarter with 775,392 shares. It’s the third consecutive quarter that Calpers has bought the stock. It disclosed a stake of 116,400 shares at the end of the third quarter of 2021, and then more than quadrupled that investment in the fourth.
The stock slid 9% in the first quarter, compared with a 5% slip in the S&P 500 index . So far in the second quarter, shares have tumbled 51%, compared with an 11% drop in the index.
In 2021, AMC shares were one of the more high-profile meme trades, stocks that surged as everyday investors took to social media apps to egg each other on to buy. Last week, the company’s first quarter beat expectations. Analysts noted the growth at the box office.
AMD is seeing more growth, and its latest quarter showed market gains at the expense of rival Intel (INTC). AMD’s data-center business and the closing the acquisition of Xilinx will cut the company’s exposure to PCs, which is an area that investors are worried will show slowing demand.
Calpers bought 663,283 more shares to end the first quarter with 3.3 million shares. The stock dropped 24% in the first quarter; so far in the second, it is down 13%.
The pension also bought 96,369 additional Block shares, raising its investment to 860,876 shares. The stock fell 16% in the first quarter; so far in the second, it has tumbled 48% .
Growth stocks like Block have been hammered this year, but the company has shown signs of resilience. Block’s first quarter, reported in the first week of May, missed estimates, but shares rose on the surge in gross profit for its Cash App. Earlier this year, analysts had been upbeat on Block’s app.
Netflix is a stock that Wall Street has been losing faith in, particularly because of its disappointing latest quarterly report, and awful outlook that called for the net loss of millions of subscribers. With the update, Netflix lost a bull, Bill Ackman, whose Pershing Square hedge fund sold its stake at a loss.
Calpers sold 605,501 Netflix shares to end the first quarter with 1.2 million shares. The stock dropped 38% in the first quarter; so far in the second, it is down 50%.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
