Why is John Burbank Buying the ‘Craigslist of China’?
Ever wonder what the 'craigslist of China' looks like? Well, maybe you should ask John Burbank of Passport Capital, which currently holds 11.8% of 58.com Inc. (NYSE:WUBA) shares, following its latest purchase of common stock.
The San Francisco-based investment firm, founded by Mr. Burbank in 2000, includes several Internet and technology companies in its equity portfolio. Hence, the entry into 58.com, following the Chinese website’s IPO on November 1st, came as little surprise. Today's new 13G filing shows that Passport Capital has quite a lot of confidence in the publicly traded company, as it has acquired 2,821,526 shares.
Passport Capital has proven to be a successful hedge fund thanks to its company-by-company research strategy. The firm takes macroeconomic analysis into account, and conducts fundamental research on each firm in order to determine potential growth opportunities.
Apart from Internet and technology, Passport Capital focuses on agriculture, energy, financial services, basic materials, consumer, healthcare, and capital markets (see a more detailed list here). The hedge fund has also been putting emphasis on investments in India, the Middle East and Northern Africa. With an equity portfolio valued at over $3 billion and a quarterly growth of 1% for the latest period, Passport Capital is a force to be reckoned with.
Since 58.com’s IPO only dates back a couple of days, little information regarding other investors is available. So, lets take a quick look at the company instead.
The China-based Beijing 58 Information and Technology Co. is the company in charge of operating the website, which specializes in online classified advertisements. The services offered by 58.com help users search for, and offer, jobs, houses and second-hand goods, while also allowing for community events to be made public. Another feature of the website is dating, a popular service that allows customers to find a partner online.
58.com achieved the largest U.S. debut by a Chinese firm this year, after its IPO raked in $187 million.
Along with the addition of 58.com, Passport Capital also has large positions in Cytec Industries (NYSE:CYT), Vivus Inc (NASDAQ:VVUS), Baidu Inc (NASDAQ:BIDU), Yelp Inc (NYSE:YELP), and Amazon.com Inc. (NASDAQ:AMZN).
With that being said, it appears Burbank is here for the growth. Judging by the nature of 58.com, and the fact that many of his other large holdings are in Internet companies with a global focus, it's clear that he thinks the newly IPO-ed stock can join the club. If, in a year, we're talking about 58.com in conjunction with Amazon and Baidu, investors will likely be very happy with that.