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- Legendary investor Bill Miller is poised to beat the S&P 500 for a second straight year thanks to a timely options bet on Uber Technologies, Bloomberg reported on Wednesday.
- Miller’s $2.2 billion mutual fund is up 36% year-to-date as of Tuesday, more than double the S&P 500’s return of 16% including dividends, according to Bloomberg.
- The Miller Opportunity Trust purchased 850,000 shares of Uber in the third quarter, along with options to buy an additional 4.2 million shares of Uber at $32 each through mid-January 2022.
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A massive bet on Uber Technologies will likely help legendary investor Bill Miller trounce the S&P 500 for the second year in a row, according to a Bloomberg report.
The Miller Opportunity Trust, a mutual fund with $2.2 billion in assets, is up 36% year-to-date as of Tuesday, more than double the S&P 500’s return of 16% including dividends, according to Bloomberg.
That strong outperformance has in part been driven by a sizable third quarter bet on Uber, just before a key November ballot initiative in California passed that exempted gig-economy companies from classifying all drivers and delivery workers as employees. That change would have increased costs for Uber significantly.
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The Miller Opportunity Trust purchased 850,000 shares of Uber in the third quarter, as well as options to buy an additional 4.2 million shares at $32 each through mid-January 2022. The mutual fund purchased the options for $8 per share – the value has since tripled to $24.75 as of early December. Shares of Uber are up more than 50% since the end of October.
According to a Bloomberg interview with the co-manager of the Opportunity Trust, Samantha McLemore, their investment in Uber was driven by their confidence and the performance of Uber CEO Dara Khosrowshahi.
“We think Dara has done a great job on fixing the culture and moving the company toward profitability rather than growth at any cost,” McLemore told Bloomberg.
Miller’s status as a legendary investor was cemented by his consecutive 15-year outperformance of the S&P 500 through 2005 when he managed the Legg Mason Value Trust.
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