Mutual funds run by Fidelity Investments bought a modest 2.4 million shares of Twitter Inc in the days after its public debut, revealing that they were not willing to take any early, big bets on the microblogging site.<\/p>\n
Fidelity’s Contrafund led the way, holding 1.1 million shares at the end of November, according to the latest available fund disclosures. That stake was worth $73 million on Monday, a small bet for a fund with net assets of $109 billion.<\/p>\n
In contrast, Contrafund’s stake in Facebook Inc was worth $1.6 billion at the end of November. Some analysts say Twitter may lose out to Facebook and Google Inc in the battle for online ad revenue.<\/p>\n
In all, nearly 30 Fidelity funds bought Twitter shares, according to data from Fidelity and Lipper Inc, a Thomson Reuters company. Fidelity declined to comment.<\/p>\n
Twitter stock is up 155% over its November 7 initial public offering price of $26 per share. But investors are debating whether it will become just a social media niche or achieve the giant status of Facebook.<\/p>\n
The stock fell 4% on Monday to a close of $66.29 after analysts at Morgan Stanley downgraded Twitter to “under weight” from “equal weight” and questioned how much online ad revenue it would collect in relation to Facebook and Google.<\/p>\n
Nevertheless, Twitter’s stock market value is a frothy $37 billion, despite being a money-losing operation. And U.S. mutual funds are sitting on some handsome gains since the IPO.<\/p>\n
T. Rowe Price Group Inc’s New Horizons Fund bought 4.6 million Twitter shares for $2.66 apiece before the IPO. Assuming that position hasn’t changed, those shares were worth $305 million on Monday, reflecting a 25-fold gain. Year-end holdings for the fund should be available within two weeks, according to T. Rowe Price spokeswoman Heather McDonold.<\/p>\n
Fidelity funds also appear to be in good position. Twitter’s stock is up 59% since November 29, the effective date for Fidelity’s latest reports for mutual fund holdings.<\/p>\n
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