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Giant Pension Exited Alibaba and Bought Coinbase, Lucid, and Rivian Stock
By: Barron's | February 13, 2022

Late in 2021, New Jersey’s state pension bought up newly public stocks that have plunged so far in 2022, and sold out of a high-profile Chinese tech company.

State of New Jersey Common Pension Fund D, the pension’s largest fund by assets, initiated investments in cryptocurrency exchange Coinbase Global (ticker: COIN), and electric-vehicle makers Lucid Group (LCID) and Rivian Automotive (RIVN), while exiting Chinese internet giant Alibaba Group Holding (BABA) in the fourth quarter. The fund disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.

The state’s Department of the Treasury, whose Division of Investment oversees the pension, didn’t respond to a request for comment on the stock trades. Pension Fund D had assets of $50.5 billion as of June 30, 2020, and “invests primarily in global equity and fixed-income securities,” according to the Treasury’s latest annual report.

The fund bought 23,179 shares of Coinbase in the fourth quarter. It had none at the end of the third quarter. Coinbase stock rose 1% in 2021 from a reference price of $250 set when shares went public that April. The S&P 500 index, for comparison, rose 27% last year. So far in 2022, Coinbase shares have dropped 23%, while the index is 7.3% lower.

Coinbase stock started its current slump in November, when the company issued a disappointing third-quarter report. Volatility and higher volumes from the recent retreat of Bitcoin and other cryptos hasn’t benefited the exchange.

Shares of EV makers have also been on the retreat as of late. Lucid stock has dropped 32% so far in 2022, while Rivian stock has cratered 43%. Both had logged double-digit gains in 2021 after going public. Lucid stock ended 2021 with a 42% gain from the close of its first day of public trading in July, after merging with a special-purpose acquisition company, and Rivian stock rose 33% from its November initial-public-offering price of $78.

The pension bought 245,836 Lucid shares and 104,442 Rivian shares in the fourth quarter.

Lucid’s third-quarter earnings report in November came up short, but investors were heartened by the number of reservations for Lucid cars. Citigroup was bullish on Lucid stock at the beginning of 2022. Initial Wall Street assessments of Rivian stock were positive, and a Rivian vehicle was named truck of the year in December by Motor Trend. An early investment in Rivian boosted Amazon.com ‘s (AMZN) latest quarter with a pretax gain.

Oddly, one of the most volatile shares last year has proven to be one of the more stable in 2022. In fact, American depositary shares of Alibaba are up 2.9% so far this year, after seeing their price cut in half last year.

Alibaba investors have shrugged off the news that SoftBank may be readying to sell some or all of its massive stake in the Chinese company. Chinese regulations remain an overhang on Alibaba, but at least one analyst thinks the company could be a long-term winner.

In the fourth quarter, New Jersey’s pension sold all 331,987 Alibaba ADRs it had owned at the end of September.

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