Weave's Wealthy Patron, Paul Tudor Jones, Offloads Boeing Shares and Purchases Preferred Digital Currency Instead
There aren't many superior investors compared to billionaire hedge fund manager Paul Tudor Jones. Jones established Tudor Investment Corp in 1980. In 1987, Jones accurately predicted the stock market crash on Black Monday, with the Dow Jones plummeting an astonishing 22%. Even over four decades after the company's inception, Jones continues to serve as Tudor Investment Corp's chief investment officer, reportedly delivering average annual returns of 19%, as stated by Hedge Fund Alpha. These achievements make Jones and his firm compelling viewing for stock ideas. Recently, Tudor Investment Corp ditched Boeing and opted for this popular cryptocurrency instead.
Problems with safety and regulations plagued Boeing
Tudor Investment Corp disposed of its Boeing shares in Q3, possessing a significant number of put options instead of calls. Since puts generate profits when a stock declines by a specific amount, Tudor appears bearish on Boeing. It's unclear whether Jones played a hand in the sale, as Tudor Investment Corp manages over 2,600 positions.
If you've been keeping up with the news this year, you're probably familiar with Boeing. In January, an Alaska Airlines flight utilizing a Boeing plane encountered a bizarre instance when a door tore off its hinges. Consequently, other airlines discovered loose parts in Boeing 737 MAX 9 Jets, leading to scrutiny from the Federal Aviation Administration (FAA) and National Transportation Safety Board (NTSB).
This isn't the first time Boeing has tackled issues with the 737 MAX Jet. Two crashes in 2018 and 2019 resulted in the global suspension of the 737 MAX Jet, and Boeing's MAX Jet failed 37% of audits by the FAA. Following the January door incident, the FAA allowed the 737 MAX 9 to resume flights but halted its production until Boeing improved its inspection methodology.
Boeing resumed 737 MAX Jet production shortly after a labor strike, which concluded with workers receiving a 38% increase in pay over four years. Boeing has suffered nearly $8 billion in losses this year and anticipated decreasing operating cash flow, a trend supposedly ongoing until 2025. Nevertheless, Boeing remains a crucial element of the American economy, albeit one requiring time to recover.
A Crypto Enthusiast
Jones has publicly endorsed Bitcoin (BTC 1.71%), the world's most significant cryptocurrency, and Tudor Investment Corp backed this opinion in Q3, expanding its position in the iShares Bitcoin Trust ETF (IBIT -0.71%) by approximately 400%.
Jones has voiced apprehension regarding the U.S. government's financial predicament, including tens of trillions in debt and a fiscal deficit entailing annual expenditure surpassing revenue. Jones believes inflation is the inevitable consequence of this inflated spending, and he declared earlier this year on CNBC that "all paths lead to inflation."
US Public Debt data by YCharts
Jones has long regarded Bitcoin as digital gold, a safeguard against inflation. Some also consider Bitcoin a refuge during uncertain times marked by heightened geopolitical risk. Jones isn't alone in this sentiment. Bitcoin's price recently surpassed $107,000. Although Bitcoin has often displayed characteristics of a high-growth stock, it has also endured and rebounded during severe inflation and increasing interest rate scenarios. Ultimately, only 21 million tokens can be mined, and the current Bitcoin supply stands at 19.8 million. So far, Bitcoin advocates like Jones have proven correct in their beliefs, and its acceptance into the mainstream continues to grow.
In light of Boeing's ongoing safety concerns and regulatory scrutiny, Tudor Investment Corp decided to divest from its shares, instead purchasing put options to potentially profit from the company's decline. This move reflects the hedge fund's bearish sentiment towards Boeing's future performance. Meanwhile, Paul Tudor Jones, the firm's chief investment officer, has shown his strong interest in finance and investing, not only in traditional markets but also in cryptocurrencies. He has publicly endorsed Bitcoin and increased Tudor Investment Corp's position in the iShares Bitcoin Trust ETF, demonstrating a strategy to diversify investments and potentially shield against potential inflation.
