Tiger Global’s next big thing: potatoes

After a year that can fairly be described as an omnishambles, Chase Coleman is desperately trying to douse out Tiger Global’s portfolio of dumpster fire tech stocks and limit the already record book-worthy 50 per cent loss in its flagship fund this year.

The latest 13F regulatory filing revealed that in the second quarter of the year it had ditched Robinhood, Zoom and DocuSign entirely and hacked back positions in the likes of Coinbase, Carvana, Snowflake, and DoorDash.

Tiger Global’s overall public equity exposure to stocks is now down to $11.9bn, according to the 13F that dropped on Monday. At the end of 2021 it stood at almost $46bn.

The timing of the fire sale was . . . unfortunate, given that many of these stocks actually bounced back in July. Robinhood alone is now up over 35 per cent since the end of the second quarter. Carvana’s shares have more than doubled over the same period.

But to FTAV the most intriguing new move was the addition of a $12.8mn position in a small company called Lamb Weston.

Eagle, Idaho-based Lamb Weston is one of the world’s biggest producers of frozen potato products, like the french fries you can find in your local supermarket. It used to be owned by ConAgra, until it was spun out and listed in 2016, and is now valued at almost $12bn.

Trivia fans might appreciate that Lamb Weston invented the water gun knife technique that revolutionised the industrial production of fries since the 1960s.

Despite a professed dedication to what the company calls “Potatovation”, Lamb Weston might seem like a weird investment for a major hedge fund overwhelmingly focused on fancy tech bets.

We scoured the website for any mention of machine learning, leveraging the blockchain, quantum computing or big data, but it really does seem dedicated to just shipping gargantuan amounts of frozen fries (80mn portions a day on average, apparently). Perhaps the simplicity is the attraction to Tiger, as Bucco Capital noted on Twitter.

Hilarious that Tiger Global bought Lamb Weston last Q

Can imagine the convo:

Chase: We’re getting fucking shelled! Next person to pitch a cloud stock gets thrown out the fucking window. What’s the opposite of the cloud?”

Analyst: Potatoes
Chase: Potatoes?
Analyst: Potatoes

— Bucco Capital (@buccocapital) August 16, 2022

FTAV suspects that it is simply just a small but potentially canny inflation hedge for Tiger, something that might help counter some of the pain elsewhere if inflation continues to pummel its portfolio.

But given the still-huge size of its positions in many unprofitable tech companies, it’s going to need a bigger potato bet than $13mn.