One of the oldest independent asset managers in the Brazil ended his years-long position at Goal about four months ago due to competition from the application video sharing TikTok.
Competition for time “has become tougher given the incredible ability of the TikTok platform to absorb the attention of its users,” IP Capital Partners said in a note to clients this month. “While the short-form video format has so far been most successful with young people, we believe it has universal appeal and will continue to penetrate older audiences around the world.”
IP Capital, founded in 1988, had more than R$4 billion under management in April, according to data from Anbima.
The manager did not mention the size of the position in Meta in the note and said, in a comment sent by email, that the position was closed in early February.
The manager, who started to build a long position in 2018, estimates that the public of USA spent 20 times more time watching TikTok than Reels, the short video platform of Instagramcontrolled by Meta, in the first three months of the year.
By focusing on driving Reels adoption, attention was eventually diverted away from highly monetized features like Reels feed and stories. Facebook (FB), which helps explain a sharp slowdown in revenue growth last year, according to the fund.
Wall Street has been disappointed in Meta this year, and the share price has halved, erasing about $500 billion in market value.
Much of the collapse came in February, when the company dropped a forecast that disappointed investors and warned of TikTok competition.
Last year, the company announced a shift toward the metaverse, a shift in strategy that was met with some skepticism.
The manager’s oldest fund, IP Participações Master FIA BDR Level I, had exposure to Meta through US-traded shares and Brazilian share receipts (BDRs), according to data compiled by Bloomberg.
The fund’s other U.S. stakes include Netflix, Charter Communications, Charles Schwab and Amazon, according to the note to clients.
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