BOSTON Jan 6 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
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.
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.
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.
Twitter stock is up 155 percent over its Nov. 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.
The stock fell 4 percent 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.
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.
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.
Fidelity funds also appear to be in good position. Twitter's
stock is up 59 percent since Nov. 29, the effective date for
Fidelity's latest reports for mutual fund holdings.