Al Gore’s investment firm recently made some big changes in its stock investments. Generation Investment Management, which the former vice president co-founded and chairs, dramatically increased investments in software giant Microsoft (ticker: MSFT) and e-commerce provider Shopify (SHOP), initiated an investment in card giant Mastercard (MA), and exited a position in rival Visa (V). The stock trades, among others, were disclosed in a form Generation filed with the Securities and Exchange Commission for the second quarter.
Generation, a London-based firm focused on sustainable and environmental, social and governance (ESG) investing, declined to comment. It had more than $36 billion of assets under management as of March 31. The firm bought 3.7 million Microsoft shares to end the second quarter with 4.2 million shares. Microsoft stock slipped 24% in the first half of the year, compared with a 21% drop in the S&P 500 index. So far in the third quarter, shares are unchanged compared with a 3.7% rise in the index. Microsoft has been cutting back on employee expenses by curbing business travel and company gatherings. Consumers have been spending less on videogames in recent months, which may be an issue for the company, which is in the process of acquiring game publisher Activision Blizzard (ATVI). Microsoft’s fiscal fourth-quarter earnings, reported in July, showed its slowest earnings growth in two years.
Shopify’s second-quarter report, from July, also disappointed, and revenue growth was hurt by a stronger dollar. Right before the report, Shopify announced the layoff of 1,000 workers, about 10% of its global workforce, as online shopping faded when consumers went back to stores. Meanwhile, Shopfiy CEO Tobe Lutke has been buying shares of cryptocurrency exchange Coinbase, which he serves as a director. Shopify stock plunged 77% in the first half of the year, and so far in the third quarter shares are down 3.6%. Generation bought 7.4 million Shopify shares in the second quarter to raise its investment to 7.5 million shares.
The firm bought two million Mastercard shares in the second quarter. It hadn’t owned any at the end of the first quarter. Mastercard stock slipped 12% in the first half of the year, and so far in the third quarter, shares are up 2.2%. Mastercard’s second-quarter earnings, reported near the end of July, were strong, as were earnings by rival Visa. Both companies are betting cryptocurrencies such as Bitcoin will one day be used widely and routinely for typical purchases. There is also a bill circulating that could shake up the giant credit-card networks of Mastercard and Visa. Speaking of Visa, Generation sold all of its 3.2 million shares in the second quarter. Visa stock slipped 9% in the first half of the year, and so far in the third quarter, shares are flat.
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