George Soros' fund bought $35 million of Tesla bonds while loading up on Amazon, Netflix stock

Key Points
  • George Soros' investment firm bought $35 million worth of Tesla bonds in the first quarter of 2018.
  • Tesla has faced production problems with its Model 3 and a management reshuffle, while CEO Elon Musk has been criticized for his leadership of the company.
  • Soros Fund Management also bought a large amount of Amazon and Netflix shares, while cutting its holding in Twitter.
George Soros
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George Soros' investment firm bought a large amount of Tesla bonds in the first quarter of 2018, giving the under pressure electric carmaker a major backer, a regulatory filing shows.

Soros Fund Management bought $35 million worth of convertible notes, which are bonds that can be converted into a specified number of common stock, according to a Securities and Exchange Commission (SEC) filing released on Tuesday. The convertible bond is due in March 2019.

Tesla has had a tough start to the year. The company has faced major production problems with its mass-market Model 3 and reshuffled top management, while CEO Elon Musk faced criticism after dismissing analysts' questions on a recent bizarre earnings call.

The electric carmaker relies heavily on the debt markets to raise money. Last year, it raised $1.8 billion in its first high-yield "junk" bond offering. Some analysts suggest that Tesla may have to raise more money to allow it to continue operating.

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But there is currently a mixed mood from investors toward Tesla. Shares are down nearly 9 percent year-to-date and at the end of March, traders were betting heavily against Tesla's bonds.

The quarterly SEC filing does not give commentary as to why Soros' firm bought the Tesla bonds, but it gives a public insight into what the fund is buying and selling. The filing was released on May 15, 45 days since the end of the first quarter, so the positioning of the fund may have changed.

Amazon back in fashion

After dumping its entire holding of Amazon stock in the fourth quarter of 2017, Soros Fund Management bought 51,200 shares in the e-commerce and cloud giant in the three months ended March 31. The Amazon stake was worth $74.1 million. Amazon has been one of the best-performing technology stocks this year, up over 34 percent year-to-date.

Soros' fund also loaded up on 20,800 Alphabet shares.

Netflix appeared to be another favorite of the fund. After buying a large amount of stock in the streaming giant in the fourth quarter of 2017, Soros Fund Management acquired another 148,500 shares in the first quarter of this year. Netflix had a very strong first quarter, adding more subscribers to its service than the market had expected.

On the flipside, Soros' fund dumped its small 34,100 share holding in Twitter. And it did not buy any shares of Facebook after completely cutting its stake in the fourth quarter of 2017.