Loeb's Third Point praises Intel, avoids crowded short positions

BOSTON (Reuters) – Billionaire investor Daniel Loeb called Intel’s resources “unmatched” in the semiconductor industry and said his firm, Third Point, is “excited” to be a long-term investor.

Loeb updated Third Point’s clients on progress at Intel in a letter seen by Reuters. Less than eight weeks ago he pushed the company to attract fresh talent, keep its best people, and explore deal options.

Last month the company said Pat Gelsinger, who had worked at Intel decades ago, would return as Chief Executive after running VMware.

Loeb heaped fresh praise on the new CEO in the letter after having tweeted about it last month.

“It is hard to think of a better person to motivate and inspire the best of Intel’s thousands of brilliant employees who will help build the company’s future,” he wrote about Gelsinger on Wednesday.

Gelsinger will have to align the company’s human, financial and intellectual property resources, which will put Intel in line to “capture the full unbounded growth of this market opportunity,” the letter said.

Loeb was similarly enthusiastic about insurer Prudential Plc, saying the Asia franchise is “substantially undervalued” but praising two leaders for making positive changes.

Loeb staged a dramatic rebound in returns last year, when his Third Point Offshore Fund ended 2020 with a 20.5% gain.

He managed to sidestep much of January’s market volatility with a 1.9% gain. His firm employs a wide variety of investment styles including investing in stocks and debt and activism.

Loeb said he sidesteps positions where many investors are already betting against the future of a company.

“We have mostly avoided taking short stakes in companies with modest liquidity and large short interest,” he wrote only a few days after millions of small investors sent retailer GameStop’s stock surging 1,700%, hurting a number of prominent hedge funds that had bet the stock would fall.

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