A $60 billion investment advisor quadrupled its money on Snap stock in 16 months -and likely scored a $4 billion gain

Evan Spiegel Snapchat logo
Snap CEO Evan Spiegel.

  • Edgewood Management likely racked up a $4 billion gain on Snap stock in 16 months.
  • The $60 billion investment advisor bought 62 million shares in the first quarter of 2020.
  • Edgewood still owned 50 million shares at the last count, worth $3.7 billion today.
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A little-known investment advisor has more than quadrupled its money on Snap stock, likely notching a $4 billion gain in the space of 16 months.

Edgewood Management, which oversees $60 billion of assets, initially snapped up 62 million shares of Snapchat’s owner in the first quarter of 2020, regulatory filings show. It probably pounced when the social-media company’s stock price nearly halved from $19 to $10 between late January and mid-March, as pandemic fears mounted.

The investment advisor boosted its stake to 75 million shares over the next six months, and Snap’s stock price more than doubled during that period, lifting the value of Edgewood’s position from $734 million to almost $2 billion. The firm cashed out about 13 million shares in the next quarter, but Snap’s stock price doubled again, valuing Edgewood’s 62 million shares at $3.1 billion at the end of last year.

Edgewood took more money off the table in the first quarter of this year, slashing its position by about 19% to 50 million shares – worth $2.6 billion at the end of March. Snap stock is currently trading close to a record high at $74, valuing Edgewood’s stake at $3.7 billion today if it hasn’t touched the position.

That figure represents a roughly $3 billion gain on its original investment, and the firm probably pocketed $1 billion from the 25 million shares it sold, assuming an average sale price of $40. That would bring its total gains, both realized and unrealized, to about $4 billion.

Still, the investment advisor may have some regrets. If it hadn’t sold a third of its 75 million Snap shares, it would boast a 4.8% stake in the company worth $5.6 billion today.

Snap was one of only 22 stocks in Edgewood’s large-cap growth equity strategy at the end of June, and ranked among its five biggest holdings along with PayPal, Visa, Nvidia, and Intuit. The strategy posted a solid 20% return – net of fees – in the first half of this year, outpacing the S&P 500 Total Return Index’s 15.3% gain.

Edgewood employs six portfolio managers including its president, Alan Breed. They pick stocks for their flagship strategy based on factors including financial health, profitability, management, and long-term earnings power. They aim to buy pieces of high-quality companies at discounts to their fair value, according to Edgewood’s website.

Edgewood didn’t immediately respond to a request for comment from Insider.