Al Gore Sells Alibaba, TSMC, And Shopify Stocks

Former Vice President Al Gore's Generation Investment Management recently made significant changes to its portfolio, the firm recently reshuffled its position in the semiconductor business, citing mounting risks to Taiwan, as one of the reasons for the new move.

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Generation sold its Alibaba stock in the fourth quarter, exited its stakes in Taiwan Semiconductor Manufacturing (TSM), Shopify SHOP –2.80% (SHOP), and exited its stake in the Taiwan Semiconductor Manufacturing company. However, in Texas Instruments TXN -0.43% (TXN), it more than quintupled its investment in the company. The company, which is based in London, disclosed the trades, among others, in a form that it filed with the Securities and Exchange Commission on Thursday.

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Neither Generation nor the former vice president of the company, co-founded by the former vice president, would comment on the investment changes. As of the end of 2022, the company managed $40.4 billion in assets on behalf of its customers.

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The price of Alibaba American depositary receipts decreased by 26% in 2022, compared with a fall of 19% in the S&P 500 index SPX –0.28%. The shares of the Chinese company have risen 14% so far this year, while the index has risen 5.2% during the same period.

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Regulation uncertainty in China, the government's Covid-19 lockdowns, and the consolidation of power by President Xi Jinping weighed on Alibaba's ADRs last year.

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Generation's co-chief investment officers, Miguel Nogales, and Mark Ferguson wrote in a January quarterly investor letter that China and America have long existed in two different internet ecosystems. “As for other industries, the question is whether they will be affected by globalization as much as those that benefited from it in the 1990s and 2000s.”

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To cut its investment to 3.7 million ADRs, Generation sold 774,248 Alibaba ADRs in the fourth quarter.

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In the fourth quarter, the firm decided to exit its investment in TSMC 2330 –0.19%, which is the world's largest manufacturer of contact chips. As of the end of the third quarter, it owned 326,654 TSMC ADRs, but none by the end of 2022.

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In their investor letter, Nogales and Ferguson wrote, "Semiconductors are the canary in the coal mine." “Supply from East Asia, including Taiwan, is critical to America's economy. There is no understatement when it comes to the consequences of disrupting the global supply chain for semiconductors. There would be turmoil in markets and countries. Taiwan's future should either worry you or very worry you, depending on whom you ask. The long-term goals of Xi Jinping for the island are clear."

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While TSMC ADRs have gained 21% so far this year, after dropping 38% in 2022, they have gained 21% so far this year. TSMC announced in January it expects to avoid the worst of the downturn in the chip industry, but Trade Algo has noted that TSMC's guidance might be a little optimistic in the face of a downturn in the chip industry.

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During the fourth quarter of 2018, Generation exited a number of investments that have surged in 2023, including Shopify. Stock prices for Shopify have risen 26% since the start of the year, compared to a 75% decline in 2022. It sold all its Shopify shares at the end of the fourth quarter, which it had owned at the end of the third quarter.

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The stock of Shopify dropped the most during the first half of 2022, most of which was early in the year. With the pandemic receding, shoppers returned to physical outlets, rather than online stores using Shopify's platform. Shopify replaced its chief financial officer and chief operating officer in September. Shares have been boosted by a new pricing plan announced in January.

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Among the stocks Generation sold, Texas Instruments stock outperformed the S&P 500 by only 12% in 2022. Despite this, the chip maker has gained 6.1% so far in 2023.

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While Texas Instruments earnings have surpassed Wall Street forecasts in recent quarters, its financial guidance has disappointed. Manufacturing capacity is being increased as planned by the company.

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In December, Generation purchased another 2.2 million shares of Texas Instruments, bringing its total to 2.7 million.