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Billionaire John Paulson reveals new tech bets, including VMware

Billionaire investor John Paulson built new stakes in several tech companies during the second quarter, according to securities filings. Paulson’s biggest new position is software company VMWare . The fund scooped up half a million shares of the VMWare, building a position worth nearly $57 million at the end of the second quarter. Paulson also built stakes in companies involved in takeover deals. One of these stocks is Coherent, which was officially bought by II-VI on July 1 in a deal that was announced in 2021. Another is IronSource . In June, Unity Software announced a deal to buy out IronSource, and Unity also recently rebuffed an offer from Applovin that would have ended the IronSource deal. A common practice for hedge funds is to buy shares of a company that is being bought, a process known as merger arbitrage, in a bet that the deal will end up being approved and close at the agreed upon price. It is not known if Paulson bought its stake in IronSource before or after the Unity deal was announced. Paulson also added small amounts to its top two positions in Horizon Therapeutics and Bausch Health . Bausch has been one of the worst performing stocks in the U.S. this year, falling more than 77% year to date. The stock was nearly cut in half in July after a federal judge issued an order that could allow generic competition for Bausch’s Xifaxan drug. It is unclear if Paulson made additional moves between the end of June and the judge’s order. The chart below shows the fund’s top holdings as of the end of June. Paulson said last year that he expected inflation to continue to rise and so he bought energy and gold stocks. That prediction proved prescient, and he still has large positions in Occidental Petroleum, APA and NovaGold. However, he did eliminate positions in Exxon and the SPDR Gold Shares fund in the second quarter.

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