UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

OF REGISTERED MANAGEMENT INVESTMENT COMPANY

811-23264

Investment Company Act file number

 

 

Altaba Inc.

(Exact name of registrant as specified in charter)

 

 

140 East 45 th Street, 15 th Floor

New York, New York 10017

(Address of principal executive offices) (Zip code)

 

 

Arthur Chong

Altaba Inc.

140 East 45 th Street, 15 th Floor

New York, New York 10017

(Name and address of agent for service)

 

 

(646) 679-2000

Registrant’s telephone number, including area code

Date of fiscal year end: December 31, 2018

Date of reporting period: September 30, 2018

 

 

 


Item 1. Schedule of Investments.

Altaba Inc.

Consolidated Schedule of Investments

As of September 30, 2018 (unaudited)

($ in 000’s, except strike prices)

 

                                                                                                                                                
Description                Expiration      Principal $ / Shares / Units      Fair Value $  

Affiliated Investments at Fair Value — 108.8%

 

           

Online Services and e-Commerce

 

           

Common shares - 108.8%

 

           

Alibaba Group Holding Limited (1)(2)(3)(4)

 

           283,315,416        46,679,048  

Other common shares in affiliated investments at fair value — 0.0%

 

           

Gomaji Corp., Ltd. (3)

 

           3,443,942        3,006  

Total Affiliated Investments at Fair Value (Cost — $2,017,332)

 

              46,682,054  

Unaffiliated Investments at Fair Value — 0.0%

 

           

Internet Software & Services

 

           

Common shares - 0.0%

 

           

SeatGeek, Inc. (1)(5)

 

           47,463        185  

Total Common Shares (Cost — $9)

 

              185  
Fixed Income Securities      Rate % (6)    Final Maturity (7)      Principal $      Fair Value $  

Money Market Funds — 5.2%

 

           

Fidelity Government Portfolio — Class I

 

   1.92         934,272        934,272  

Invesco Government and Agency Portfolio — Institutional Class

 

   1.97         1,000,000        1,000,000  

Invesco Government Treasury and Agency Portfolio — Institutional Class

 

   1.97         294,348        294,348  

JP Morgan U.S. Government Money Market Fund — Capital Class

 

   1.94         7,009        7,009  

Total Money Market Investments (Cost — $2,235,629)

 

           2,235,629        2,235,629  
     Rate Type      Rate % (8)    Final Maturity      Principal $      Fair Value $  

Short Term

              

Corporate Debt — 1.1%

              

Financial — 0.5%

              

Berkshire Hathaway Finance Corp.

     Floating      3.02 (3 month LIBOR USD + 0.69)      3/15/2019        5,102        5,117  

Branch Banking and Trust Co.

     Floating      2.87 (3 month LIBOR USD + 0.53)      5/1/2019        12,500        12,528  

Jackson National Life Global Funding

     Fixed      1.88      10/15/2018        15,989        15,985  

National Rural Utilities Coop Finance Corp

     Fixed      1.65      2/8/2019        275        274  

National Rural Utilities Coop Finance Corp

     Fixed      10.38      11/1/2018        9,801        9,862  

National Rural Utilities Coop Finance Corp

     Floating      2.54 (3 month LIBOR USD + 0.20)      4/5/2019        14,952        14,962  

New York Life Global Funding

     Fixed      1.55      11/2/2018        29,500        29,478  

Principal Life Global Funding II

     Fixed      1.50      4/18/2019        3,870        3,846  

Principal Life Global Funding II

     Fixed      2.25      10/15/2018        14,148        14,147  

Protective Life Global Funding

     Floating      2.76 (3 month LIBOR USD + 0.42)      3/29/2019        10,000        10,013  

U.S. Bancorp

     Fixed      1.95      11/15/2018        28,000        27,983  

U.S. Bancorp

     Floating      2.80 (3 month LIBOR USD + 0.49)      11/15/2018        12,250        12,252  

USAA Capital Corp.

     Floating      2.57 (3 month LIBOR USD + 0.23)      2/1/2019        2,520        2,522  

Wells Fargo Bank N.A.

     Fixed      1.80      11/28/2018        38,000        37,961  

Westpac Banking Corp

     Fixed      1.95      11/23/2018        28,500        28,478  

Total

              225,407        225,408  

 

2


                                                                                                                                                

Industrial — 0.6%

              

Altera Corp

     Fixed      2.50      11/15/2018        4,500        4,501  

American Honda Finance Corp

     Fixed      1.50      11/19/2018        19,500        19,473  

American Honda Finance Corp

     Fixed      2.13      10/10/2018        20,000        19,997  

American Honda Finance Corp

     Floating      2.60 (3 month LIBOR USD + 0.28)      11/19/2018        11,172        11,176  

Apple Inc.

     Fixed      1.70      2/22/2019        12,000        11,968  

Apple Inc.

     Floating      3.13 (3 month LIBOR USD + 0.82)      2/22/2019        7,000        7,023  

Caterpillar Financial Services Corp.

     Fixed      1.80      11/13/2018        18,300        18,285  

Chevron Corp

     Fixed      1.79      11/16/2018        7,000        6,995  

Cisco Systems Inc.

     Floating      2.68 (3 month LIBOR USD + 0.34)      9/20/2019        11,000        11,032  

John Deere Capital Corporation

     Fixed      1.65      10/15/2018        7,394        7,392  

John Deere Capital Corporation

     Floating      2.91 (3 month LIBOR USD + 0.57)      1/8/2019        12,500        12,519  

Johnson & Johnson

     Floating      2.59 (3 month LIBOR USD + 0.27)      3/1/2019        2,339        2,342  

Microsoft Corp

     Fixed      1.30      11/3/2018        32,582        32,545  

Oracle Corp

     Fixed      2.38      1/15/2019        5,000        4,997  

Shell International Finance BV

     Fixed      1.63      11/10/2018        4,000        3,996  

Shell International Finance BV

     Fixed      2.00      11/15/2018        20,000        19,988  

Toyota Motor Credit Corporation

     Fixed      2.00      10/24/2018        20,000        19,995  

Toyota Motor Credit Corporation

     Floating      2.60 (3 month LIBOR USD + 0.26)      1/9/2019        2,000        2,001  

Toyota Motor Credit Corporation

     Floating      2.73 (3 month LIBOR USD + 0.39)      1/17/2019        6,000        6,007  

Toyota Motor Credit Corporation

     Floating      3.14 (3 month LIBOR USD + 0.82)      2/19/2019        5,359        5,376  

Walt Disney Company

     Floating      2.66 (3 month LIBOR USD + 0.32)      1/8/2019        20,000        20,016  

Total

              247,646        247,624  

Total Corporate Debt (Cost — $473,267)

              473,053        473,032  
Commercial Paper — 15.0%           Rate % (9)                     

ABN Amro Funding USA LLC

     Zero Coupon      2.27      11/26/2018        15,000        14,947  

ABN Amro Funding USA LLC

     Zero Coupon      2.30      1/11/2019        35,000        34,774  

ABN Amro Funding USA LLC

     Zero Coupon      2.44      2/25/2019        50,000        49,508  

Australia and New Zealand Banking Group Limited

     Zero Coupon      2.25      1/10/2019        100,000        99,374  

Australia and New Zealand Banking Group Limited

     Zero Coupon      2.25      1/11/2019        100,000        99,368  

BNZ International Funding Limited

     Zero Coupon      2.27      11/13/2018        31,880        31,794  

BPCE

     Zero Coupon      2.28      11/8/2018        60,000        59,857  

BPCE

     Zero Coupon      2.26      11/30/2018        40,000        39,850  

BPCE

     Zero Coupon      2.37      12/20/2018        100,000        99,478  

Caisse des Depots et Consignations

     Zero Coupon      2.10      10/24/2018        75,000        74,900  

Caisse des Depots et Consignations

     Zero Coupon      2.26      11/15/2018        58,418        58,254  

The Coca-Cola Company

     Zero Coupon      2.10      10/30/2018        49,500        49,417  

The Coca-Cola Company

     Zero Coupon      2.10      10/31/2018        70,000        69,878  

The Coca-Cola Company

     Zero Coupon      2.12      11/13/2018        25,000        24,937  

The Coca-Cola Company

     Zero Coupon      2.14      11/20/2018        125,000        124,630  

The Coca-Cola Company

     Zero Coupon      2.19      12/3/2018        36,000        35,863  

The Coca-Cola Company

     Zero Coupon      2.20      12/4/2018        65,000        64,748  

The Coca-Cola Company

     Zero Coupon      2.35      1/11/2019        100,000        99,340  

Commonwealth Bank of Australia

     Zero Coupon      2.20      11/16/2018        50,000        49,861  

Cummins Inc.

     Zero Coupon      2.08      10/9/2018        20,000        19,991  

Cummins Inc.

     Zero Coupon      2.08      10/11/2018        94,000        93,946  

Danske Corp

     Zero Coupon      2.25      11/20/2018        75,000        74,768  

Danske Corp

     Zero Coupon      2.25      11/26/2018        25,000        24,913  

Danske Corp

     Zero Coupon      2.25      12/3/2018        25,000        24,902  

Danske Corp

     Zero Coupon      2.30      1/11/2019        25,000        24,838  

John Deere Capital Corporation

     Zero Coupon      2.02      10/10/2018        125,000        124,937  

 

3


                                                                                                                                                

John Deere Capital Corporation

     Zero Coupon                                                           2.11      10/22/2018        75,000        74,908  

John Deere Capital Corporation

     Zero Coupon      2.18      10/30/2018        75,000        74,869  

Exxon Mobil Corp

     Zero Coupon      —        10/1/2018        50,000        50,000  

Exxon Mobil Corp

     Zero Coupon      1.98      10/3/2018        50,000        49,995  

Exxon Mobil Corp

     Zero Coupon      2.04      10/10/2018        115,000        114,942  

Exxon Mobil Corp

     Zero Coupon      2.01      10/16/2018        60,000        59,950  

Exxon Mobil Corp

     Zero Coupon      2.00      10/22/2018        100,000        99,884  

Exxon Mobil Corp

     Zero Coupon      2.08      11/30/2018        14,500        14,450  

Exxon Mobil Corp

     Zero Coupon      2.03      12/5/2018        50,000        49,818  

Exxon Mobil Corp

     Zero Coupon      2.18      12/11/2018        90,000        89,617  

Exxon Mobil Corp

     Zero Coupon      2.22      12/12/2018        80,000        79,648  

Exxon Mobil Corp

     Zero Coupon      2.18      12/17/2018        20,000        19,908  

Federation des Caisses Desjardins du Quebec

     Zero Coupon      2.10      10/12/2018        32,750        32,729  

Federation des Caisses Desjardins du Quebec

     Zero Coupon      2.29      12/12/2018        100,000        99,546  

General Dynamics Corp

     Zero Coupon      2.04      10/16/2018        80,000        79,932  

General Dynamics Corp

     Zero Coupon      2.08      10/23/2018        53,000        52,933  

Henkel US Operations Corp

     Zero Coupon      2.22      11/15/2018        35,000        34,904  

Henkel US Operations Corp

     Zero Coupon      2.26      12/10/2018        17,000        16,926  

KfW

     Zero Coupon      —        10/1/2018        30,000        30,000  

Koch Resources, LLC

     Zero Coupon      2.08      10/12/2018        13,000        12,992  

Lloyds Bank PLC

     Zero Coupon      2.24      11/26/2018        60,000        59,793  

Merck & Co., Inc.

     Zero Coupon      1.98      10/10/2018        50,000        49,975  

National Australia Bank Limited

     Zero Coupon      2.20      12/7/2018        50,000        49,797  

National Australia Bank Limited

     Zero Coupon      2.15      12/10/2018        75,000        74,689  

National Australia Bank Limited

     Zero Coupon      2.15      12/17/2018        75,000        74,657  

National Securities Clearing Corporation

     Zero Coupon      2.09      11/2/2018        20,000        19,963  

National Securities Clearing Corporation

     Zero Coupon      2.16      11/16/2018        30,000        29,918  

National Securities Clearing Corporation

     Zero Coupon      2.16      11/20/2018        50,000        49,851  

National Securities Clearing Corporation

     Zero Coupon      2.17      11/28/2018        20,000        19,931  

National Securities Clearing Corporation

     Zero Coupon      2.17      11/30/2018        100,000        99,642  

National Securities Clearing Corporation

     Zero Coupon      2.20      12/11/2018        30,000        29,871  

Nestle Capital Corp

     Zero Coupon      2.20      11/13/2018        40,000        39,896  

Nestle Capital Corp

     Zero Coupon      2.22      11/15/2018        30,000        29,917  

Nestle Capital Corp

     Zero Coupon      2.19      11/30/2018        50,000        49,819  

Nestle Capital Corp

     Zero Coupon      2.19      12/7/2018        80,000        79,677  

Nissan Motor Acceptance Corporation

     Zero Coupon      2.14      11/2/2018        22,000        21,958  

Nissan Motor Acceptance Corporation

     Zero Coupon      2.16      11/13/2018        18,000        17,954  

Nissan Motor Acceptance Corporation

     Zero Coupon      2.21      12/6/2018        20,000        19,920  

Nissan Motor Acceptance Corporation

     Zero Coupon      2.21      12/7/2018        60,000        59,755  

Nissan Motor Acceptance Corporation

     Zero Coupon      2.28      1/11/2019        50,000        49,680  

Nissan Motor Acceptance Corporation

     Zero Coupon      2.35      2/25/2019        50,000        49,524  

PSP Capital Inc.

     Zero Coupon      2.17      11/27/2018        60,000        59,796  

PSP Capital Inc.

     Zero Coupon      2.19      11/28/2018        50,000        49,825  

Paccar Financial Corp

     Zero Coupon      2.07      10/12/2018        19,000        18,988  

The Procter & Gamble Company

     Zero Coupon      2.22      12/10/2018        75,000        74,679  

The Procter & Gamble Company

     Zero Coupon      2.22      12/12/2018        165,000        164,274  

The Procter & Gamble Company

     Zero Coupon      2.22      12/13/2018        100,000        99,554  

Roche Holdings, Inc.

     Zero Coupon      1.98      10/3/2018        20,000        19,998  

Santander UK PLC

     Zero Coupon      2.24      11/30/2018        60,000        59,778  

Santander UK PLC

     Zero Coupon      2.29      12/7/2018        60,000        59,746  

Simon Property Group, L.P.

     Zero Coupon      2.03      10/10/2018        25,000        24,987  

Simon Property Group, L.P.

     Zero Coupon      2.03      10/16/2018        30,000        29,975  

Simon Property Group, L.P.

     Zero Coupon      2.09      10/22/2018        20,000        19,976  

 

4


                                                                                                                                                

Simon Property Group, L.P.

     Zero Coupon                                                           2.14      11/26/2018        45,000        44,851  

Simon Property Group, L.P.

     Zero Coupon      2.17      12/5/2018        80,000        79,689  

Skandinaviska Enskilda Banken AB

     Zero Coupon      2.25      12/7/2018        60,000        59,751  

Societe Generale

     Zero Coupon      2.30      12/7/2018        60,000        59,745  

Sumitomo Mitsui Banking Corp

     Zero Coupon      2.07      10/22/2018        85,000        84,898  

Sumitomo Mitsui Banking Corp

     Zero Coupon      2.26      11/14/2018        60,000        59,836  

Sumitomo Mitsui Banking Corp

     Zero Coupon      2.27      11/27/2018        60,000        59,786  

Sumitomo Mitsui Banking Corp

     Zero Coupon      2.26      12/10/2018        95,000        94,586  

Sumitomo Mitsui Banking Corp

     Zero Coupon      2.21      12/17/2018        50,000        49,766  

Sumitomo Mitsui Banking Corp

     Zero Coupon      2.28      1/11/2019        90,000        89,424  

Svenska Handelsbanken AB

     Zero Coupon      2.25      12/7/2018        60,000        59,751  

Swedbank AB

     Zero Coupon      2.23      11/30/2018        25,000        24,908  

Swedbank AB

     Zero Coupon      2.25      12/5/2018        50,000        49,799  

Swedbank AB

     Zero Coupon      2.27      12/6/2018        135,000        134,443  

Toronto-Dominion Bank

     Zero Coupon      2.11      10/22/2018        45,000        44,945  

Toronto-Dominion Bank

     Zero Coupon      2.22      11/29/2018        45,500        45,336  

Toronto-Dominion Bank

     Zero Coupon      2.22      11/30/2018        75,000        74,725  

Toronto-Dominion Bank

     Zero Coupon      2.24      12/7/2018        54,500        54,275  

Toronto-Dominion Bank

     Zero Coupon      2.30      12/10/2018        55,000        54,756  

Toronto-Dominion Bank

     Zero Coupon      2.21      12/17/2018        25,000        24,883  

Total Capital Canada Ltd.

     Zero Coupon      2.14      11/1/2018        50,000        49,908  

Total Capital Canada Ltd.

     Zero Coupon      2.18      11/6/2018        60,000        59,870  

Toyota Credit Canada Inc.

     Zero Coupon      2.35      12/7/2018        50,000        49,783  

Toyota Industries Commercial Finance, Inc.

     Zero Coupon      2.06      10/9/2018        20,000        19,991  

Toyota Industries Commercial Finance, Inc.

     Zero Coupon      2.21      11/15/2018        35,000        34,904  

Toyota Motor Credit Corporation

     Zero Coupon      2.11      11/1/2018        38,000        37,931  

Unilever Capital Corporation

     Zero Coupon      2.03      10/23/2018        30,000        29,963  

United Parcel Service, Inc.

     Zero Coupon      1.99      10/4/2018        50,000        49,992  

United Parcel Service, Inc.

     Zero Coupon      1.99      10/5/2018        50,000        49,989  

Walmart Inc.

     Zero Coupon      2.00      10/9/2018        50,000        49,978  

Walmart Inc.

     Zero Coupon      2.00      10/10/2018        143,000        142,929  

Walmart Inc.

     Zero Coupon      2.18      10/29/2018        135,000        134,772  

Walmart Inc.

     Zero Coupon      2.13      10/31/2018        90,000        89,841  

Total Commercial Paper (Cost — $6,414,768)

              6,435,048        6,414,791  
Certificates of Deposits — 1.3%           Rate % (8)                     

Bank of Montreal

     Fixed      2.15      11/1/2018        50,000        50,000  

Bank of Montreal

     Fixed      2.30      12/20/2018        75,000        75,000  

Bank of Montreal

     Fixed      2.34      1/11/2019        62,500        62,500  

Bank of Montreal

     Fixed      2.14      12/7/2018        60,000        60,000  

Bank of Montreal

     Fixed      2.35      1/4/2019        60,000        60,000  

BNP Paribas

     Fixed      2.23      12/14/2018        75,000        75,000  

BNP Paribas

     Fixed      2.25      12/20/2018        75,000        75,000  

BNP Paribas

     Fixed      2.25      12/13/2018        100,000        100,000  

Total Certificates of Deposits (Cost — $557,500)

              557,500        557,500  

Agency Bonds — 0.0%

              

Federal Home Loan Mortgage Corp

     Fixed      2.31      1/25/2019        20,000        19,938  

Total Agency Bonds (Cost — $20,000)

              20,000        19,938  

 

5


                                                                                                                                                                             
Agency Notes—5.4%                  Rate % (9)                     

Federal Home Loan Banks

        Zero Coupon      0.88      10/3/2018        17,975        17,973  

Federal Home Loan Banks

        Zero Coupon      1.25      10/5/2018        4,275        4,274  

Federal Home Loan Banks

        Zero Coupon      1.70      10/12/2018        41,710        41,683  

Federal Home Loan Banks

        Zero Coupon      1.81      10/17/2018        145,000        144,864  

Federal Home Loan Banks

        Zero Coupon      1.95      10/29/2018        50,000        49,917  

Federal Home Loan Banks

        Zero Coupon      2.07      11/23/2018        300,000        299,049  

Federal Home Loan Banks

        Zero Coupon      2.13      12/7/2018        950,000        946,143  

Federal Home Loan Banks

        Zero Coupon      2.13      12/10/2018        100,000        99,576  

Federal Home Loan Banks

        Zero Coupon      2.13      12/12/2018        115,000        114,499  

Federal Home Loan Mortgage Corp

        Zero Coupon      2.12      12/5/2018        250,000        249,015  

Federal Home Loan Mortgage Corp

        Zero Coupon      2.12      12/6/2018        340,000        338,640  

Total Agency Notes (Cost — $2,306,085)

                 2,313,960        2,305,633  

U.S. Government Debt — 6.9%

                 

United States Treasury

        Zero Coupon      2.07      12/6/2018        650,000        647,465  

United States Treasury

        Zero Coupon      2.15      1/3/2019        175,000        174,008  

United States Treasury

        Zero Coupon      2.29      2/28/2019        100,000        99,050  

United States Treasury

        Zero Coupon      2.06      11/29/2018        180,000        179,374  

United States Treasury

        Zero Coupon      2.08      12/13/2018        40,000        39,828  

United States Treasury

        Zero Coupon      2.15      1/10/2019        200,000        198,780  

United States Treasury

        Fixed      2.12      11/30/2018        135,000        134,796  

United States Treasury (4)

        Fixed      1.50      12/31/2018        650,990        649,808  

United States Treasury

        Fixed      2.12      11/30/2018        100,000        99,870  

United States Treasury

        Fixed      1.94      10/31/2018        97,600        97,496  

United States Treasury (4)

        Fixed      1.13      2/28/2019        655,864        652,585  

Total U.S. Government Debt (Cost — $2,974,417)

                 2,984,454        2,973,060  

Total Short Term Fixed Income Securities (Cost — $12,746,037) — 29.7%

 

              12,784,015        12,743,954  

Long Term

                 

Corporate Debt — 0.5%

                 

Financial — 0.2%

                 

Berkshire Hathaway Finance Corp.

        Floating      2.65 (3 month LIBOR USD + 0.32)      1/10/2020        2,500        2,505  

Branch Banking and Trust Co.

        Floating      2.79 (3 month LIBOR USD + 0.45)      1/15/2020        4,000        4,015  

Mass Mutual Global Funding II

        Fixed      1.95      9/22/2020        20,000        19,567  

Protective Life Global Funding

        Fixed      2.16      9/25/2020        7,000        6,836  

U.S. Bank N.A

        Fixed      2.05      10/23/2020        25,000        24,484  

Wells Fargo Bank N.A.

        Fixed      2.60      1/15/2021        35,000        34,407  

Total

                 93,500        91,814  

 

6


                                                                                                                                                                             

Industrial — 0.3%

                 

American Honda Finance Corp

        Fixed      2.45      9/24/2020        20,000        19,768  

American Honda Finance Corp

        Fixed      2.65      2/12/2021        12,500        12,353  

American Honda Finance Corp

        Floating      2.55 (3 month LIBOR USD + 0.21)      2/12/2021        12,500        12,501  

Apple Inc.

        Floating      2.54 (3 month LIBOR USD + 0.20)      2/7/2020        13,506        13,538  

Apple Inc.

        Floating      2.41 (3 month LIBOR USD + 0.07)      5/11/2020        7,000        7,002  

Chevron Corp

        Floating      2.53 (3 month LIBOR USD + 0.21)      3/3/2020        12,000        12,028  

Daimler Finance North America LLC

        Fixed      2.30      1/6/2020        18,543        18,365  

Honeywell International Inc.

        Floating      2.62 (3 month LIBOR USD + 0.28)      10/30/2019        3,563        3,572  

Intel Corp

        Floating      2.42 (3 month LIBOR USD + 0.08)      5/11/2020        11,000        11,017  

John Deere Capital Corporation

        Floating      2.63 (3 month LIBOR USD + 0.30)      3/13/2020        8,140        8,159  

Siemens Financieringsmaatschappij N.V.

        Floating      2.67 (3 month LIBOR USD + 0.34)      3/16/2020        15,000        15,043  

Toyota Motor Credit Corporation

        Floating      2.60 (3 month LIBOR USD + 0.26)      4/17/2020        12,000        12,020  

Total

                 145,752        145,366  

Total Corporate Debt (Cost — $238,297)

                 239,252        237,180  

Total Long Term Fixed Income Securities (Cost — $238,297) — 0.5%

                 239,252        237,180  

 

                                                                                                                                                                             
Call Options (5)(10)    Counterparty      # of Contracts      Strike Price $    Expiration      Notional Amount $      Fair Value $  

Call Options — 0.7%

                 

Altaba Inc.

     JP Morgan        1      53.24      12/1/2018        456,851        102,048  

Altaba Inc.

     Goldman Sachs        1      53.24      12/1/2018        456,851        102,048  

Altaba Inc.

     Citibank        1      53.24      12/1/2018        171,298        38,263  

Altaba Inc.

     Morgan Stanley        1      53.24      12/1/2018        171,298        38,263  

Total Call Options (Premiums Paid — $140,502)

 

              1,256,298        280,622  

Total Unaffiliated Investments (Cost — $15,360,474)

 

              15,258,896        15,497,570  

 

                                                                                                                                                                             
Investment in Controlled Affiliate                         Units      Fair Value $  

Internet Software & Services

                 

Excalibur IP, LLC (1)(5)

                 3,434        250,000  

Total Investment in Controlled Affiliate (Cost — $0) — 0.6%

 

              250,000  
              

 

 

 

Total Investments — 145.5%

 

                 62,429,624  

Liability for Convertible Notes — (3.1)%

 

                 (1,327,417

Liability for Margin Loan Payable — (7.2)%

 

                 (3,081,088

Other Liabilities/Other Assets — (35.2)%

 

                 (15,114,524
              

 

 

 

Net Assets Applicable to Common Shares — 100%

 

            $ 42,906,595  
                 

 

 

 

 

7


(1)

Non-income producing securities.

(2)

The Fund is a party to a registration rights agreement with respect to its Alibaba shares. The registration rights agreement contains certain provisions restricting the ability to sell the Alibaba shares in certain circumstances. As of September 30, 2018, some of the Fund’s Alibaba shares were held in the form of ordinary shares. The Alibaba ordinary shares would need to be converted to American Depository Shares prior to any sale on the New York Stock Exchange. For the further description of this investment, see the Fund’s Registration Statement on Form N-2.

(3)

Restricted security. Resale is contigent on issuer consent, aggregate holdings equal 108.9% of the net assets of the Fund.

(4)

All or a portion of this security has been pledged as collateral in connection with the Fund’s Margin Loan Agreement. As of September 30, 2018, the number of Alibaba shares pledged as collateral was 48,125,000 and the total value of securities pledged as collateral for the Margin Loan Agreement was $4.6 billion, as well as approximately $2 billion of cash and short term investments.

(5)

Fair-value security. Represents fair value measured in good faith under procedures approved by the Board of Directors, aggregate holdings equal 1.2% of the net assets of the Fund.

(6)

Presented rate represents the Money Market Fund’s average 7-day % yield.

(7)

Money Market Funds do not have a set maturity date.

(8)

Coupon rate %.

(9)

Rate presented is yield as of September 30, 2018.

(10)

American-style options.

 

Written Warrants (1)(2)(3)    Weighted Average
Strike Price $
     Expiration (1)      # of Contracts      Fair Value $  

Total Value of Written Warrants (Premiums Received — $91,510)

     68.57        3/1/19 - 5/24/19        4        (124,300

 

(1)

European style warrants.

(2)

The initial strike price of the written warrants was $71.24. Counterparties to the written warrants may make adjustments to certain terms of the written warrants upon the occurrence of specified events, if the event results in a material change to the trading price of Altaba’s common stock or the value of the written warrants. The adjusted weighted average strike price of $68.57 was used in estimating the fair value of the written warrants as of September 30, 2018. Altaba and one Counterparty terminated the written warrant transaction between them in June 2018.

(3)

Fair-value security. Represents fair value measured in good faith under procedures approved by the Board of Directors, aggregate holdings equal (0.3)% of the net assets of the Fund.

At September 30, 2018, the tax cost basis of the Fund’s investments and derivatives was $18,916,585 and the unrealized appreciation and depreciation were $43,390,878 and ($2,139), respectively, with a net unrealized appreciation of $43,388,739.

 

8


Hierarchy of Fair Value Inputs

The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2—Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.

Level 3—Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing management’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Fund intends to recognize transfers between Level 1, Level 2, and Level 3 as of the beginning of the reporting period.

The following table reflects the valuation level used in the consolidated schedule of investments as of September 30, 2018 for the Fund’s assets (in thousands):

 

     Level 1      Level 2      Level 3      Total  

Affiliated investments

   $ 46,682,054      $ —        $ —        $ 46,682,054  

Unaffiliated investments:

           

Common shares

     —          —          185        185  

Money market funds

     2,235,629        —          —          2,235,629  

Fixed income securities:

           

Corporate debt

     —          710,212        —          710,212  

Commercial paper

     —          6,414,791        —          6,414,791  

Certificates of deposits

     —          557,500        —          557,500  

Agency bonds

     —          19,938        —          19,938  

Agency notes

     —          2,305,633        —          2,305,633  

U.S. government debt

     —          2,973,060        —          2,973,060  

Call options

     —          —          280,622        280,622  

Investment in controlled affiliate:

           

Excalibur (1)

     —          —          250,000        250,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

Financial assets at fair value

     48,917,683        12,981,134        530,807        62,429,624  

Written warrants

     —          —          (124,300      (124,300
  

 

 

    

 

 

    

 

 

    

 

 

 

Total financial assets and liabilities at fair value

   $ 48,917,683      $ 12,981,134      $ 406,507      $ 62,305,324  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Excalibur assets relate to the Fund’s patent portfolio.

 

9


The following is a reconciliation of investments for which significant unobservable inputs (Level 3) were used in determining fair value (in thousands):

 

     Total
Investments
in Securities
    Affiliated
Investments
    Unaffiliated
Investments
    Call
Options
    Investment in
Controlled
Affiliate
    Written
Warrants
 

Balance as of January 1, 2018

   $ 967,575     $ 72,389     $ 10,355     $ 495,840     $ 665,000     $ (276,009

Purchases

     82,435       —         —         —         —         82,435  

Sales

     (153,963     —         (5,422     (144,366     (4,175     —    

Cost adjustment for Altaba tender offer

     (10,363     —         —         (10,363     —         —    

Change in unrealized appreciation (depreciation)

     (442,740     —         3,830       (150,014     (415,000     118,444  

Realized gain (loss)

     35,952       —         (8,578     89,525       4,175       (49,170

Transfers out of Level 3

     (72,389     (72,389     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of September 30, 2018

   $ 406,507     $ —       $ 185     $ 280,622     $ 250,000     $ (124,300
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The change in unrealized appreciation (depreciation) attributable to securities owned on September 30, 2018, which were valued using significant unobservable inputs (Level 3) amounted to $(442,740).

 

10


The fair values of Altaba’s Level 1 financial assets and liabilities are based on quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. The fair values of Altaba’s Level 2 financial assets and liabilities are obtained using quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets in markets that are not active; and inputs other than quoted prices (e.g., interest rates and yield curves). Altaba utilizes a pricing service to assist in obtaining fair value pricing for the marketable debt securities. The fair value for Altaba’s Level 3 financial assets were obtained using a variety of techniques including Black-Scholes models, transaction price and market approaches.

The balance for the Fund’s assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2018 was $407 million, net.

 

Type of investment

   Fair Value at
September 30,
2018 (in
thousands)
   

Valuation Technique

  

Unobservable Inputs

Unaffiliated investments—common shares

   $ 185     Transaction price    Price per share    $2.60 - $5.20

Investment in controlled affiliate—Excalibur

   $ 250,000     Market approach    Number of patents plus applications pending    3,434

Call options

   $ 280,622     Black Scholes Model    Expected dividend yield    0.02%
        Risk-free interest rate    2.41%
        Market Volatility    34.48%
        Expected life (in years)    0.18

Written warrants

   $ (124,300   Black Scholes Model    Expected dividend yield    0.02%
        Risk-free interest rate    2.57%
        Market Volatility    29.81% - 30.64%
        Expected life (in years)    0.54

Convertible Senior Notes

In 2013, Altaba issued $1.4375 billion aggregate principal amount of 0.00% Convertible Senior Notes due in 2018. The Convertible Notes are carried at their original issuance value, net of unamortized debt discount, and are not marked to market each period. The approximate estimated fair value of the Convertible Notes as of September 30, 2018 was approximately $1.3 billion. The estimated fair value of the Convertible Notes was determined on the basis of quoted market prices observable in the market, interest rate spreads, and time to maturity.

Through August 31, 2018, the aggregate principal amount of approximately $446 million of the Convertibles Notes have been submitted for early conversion. Upon early conversion of the Convertible Notes, holders will receive cash, shares of Altaba’s common stock, or a combination thereof, at Altaba’s election. Altaba has elected to settle all conversion requests received through August 31, 2018 in cash.

 

11


Margin Loan

On February 23, 2018, Altaba HK MC Limited (the “Borrower”) entered into a $3 billion margin loan agreement (the “Margin Loan Agreement”) with JPMorgan Chase Bank, N.A., London Branch (“JPM”) and Credit Suisse AG, Cayman Islands Branch (“CS”; and JPM and CS, collectively referred to, along with other financial institutions that may become party to the Margin Loan Agreement as lenders from time to time, the “Lenders”). Loans under the Margin Loan Agreement will bear interest at a variable rate of 3 Month LIBOR plus a margin of 2.25% and have a maturity date in February 2021.

Quantitative Disclosure of Derivative Holdings

The following tables show additional disclosures related to the Fund’s derivative and hedging activities, including how such activities are accounted for on the Fund’s financial positions. The Fund entered into several transactions to hedge the impact of dilution from potential exercise of the Convertible Notes. In conjunction with the hedge transactions, the Fund sold written warrants to reduce the overall cost of the hedge. These derivatives are not accounted for as hedging instruments.

There is no master netting arrangement policy on these derivatives.

Fair value of derivative instruments as of September 30, 2018 (in thousands):

 

Derivative Instruments

  

Statement of Assets and Liabilities Location

   Call Spread  

Call options

  

Unaffiliated investments

   $ 280,622  

Written warrants

  

Written warrants

   $ (124,300

The average quarterly fair value of purchased options during the period ended September 30, 2018 was $428 million.

The average quarterly fair value of written warrants during the period ended September 30, 2018 was $238 million.

The realized gain (loss) and change in unrealized appreciation (depreciation) on derivatives recognized on the consolidated statement of operations for the period ended September 30, 2018 are as follows (in thousands):

Amount of realized gain (loss) on derivatives recognized as a result of operations:

 

     Call Options      Written Warrants      Total  

Equity contracts

   $ 89,525      $ (49,170    $ 40,355  
  

 

 

    

 

 

    

 

 

 

Total

   $ 89,525      $ (49,170    $ 40,355  
  

 

 

    

 

 

    

 

 

 

Change in unrealized appreciation (depreciation) on derivatives recognized as a result of operations:

 

     Call Options      Written Warrants      Total  

Equity contracts

   $ (150,014    $ 118,444      $ (31,570
  

 

 

    

 

 

    

 

 

 

Total

   $ (150,014    $ 118,444      $ (31,570
  

 

 

    

 

 

    

 

 

 

 

12


Investments in Affiliates (1)

If the Fund’s holding represents ownership of 5% or more of voting securities of a company, the company is deemed to be an affiliate as defined in the 1940 Act. The Fund had the following transactions during the period ended September 30, 2018 in securities of affiliated companies:

 

     Alibaba Group
Holding Limited
    Yahoo Japan
Corporation
    Gomaji
Corp., Ltd.
    Hortonworks,
Inc. -
Common
Shares
    Hortonworks,
Inc. -
Common
Warrants
    Hortonworks,
Inc. - Series A
Stock
Warrants
 

Balance of shares held at January 1, 2018

     383,565,416       2,025,923,000       3,589,942       3,845,806       476,368       3,250,000  

Purchases

     —         —         —         —         —         —    

Sales

     (100,250,000     (2,025,923,000     (146,000     (7,572,174     —         —    

Shares converted related to the Altaba tender offer

     —         —         —         3,726,368       (476,368     (3,250,000

Balance of shares held at September 30, 2018

     283,315,416       —         3,443,942       —         —         —    

Fair value as of September 30, 2018 (2)

   $ 46,679,048     $ —       $ 3,006     $ —       $ —       $ —    

Change in unrealized appreciation (depreciation) (2)

   $ (18,756,856   $ (6,413,480   $ (1,346   $ (123,483   $ —       $ —    

Distributions (2)(3)

   $ —       $ 167,989     $ 114     $ —       $ —       $ —    

Net realized gain (loss) (2)

   $ 17,110,386     $ 3,572,387     $ (123   $ 113,800     $ —       $ —    

 

     Excalibur
IP, LLC
 

Balance of patents held and applications pending at January 1, 2018

     3,587  

Change in patents held

     (153

Balance of patents held and applications pending at September 30, 2018

     3,434  

Fair value as of September 30, 2018 (2)

   $ 250,000  

Change in unrealized appreciation (depreciation) (2)

   $ (415,000

Distributions (2)

   $ —    

Net realized gain (loss) (2)

   $ 4,175  

 

(1)

Affiliated issuer, as defined in the Investment Company Act of 1940 (the “1940 Act”).

(2)

In thousands.

(3)

Gross dividend.

 

13


Item 2.

Controls and Procedures.

 

  (a)

The Registrant’s Chief Executive Officer and Chief Financial and Accounting Officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) (17 CFR 270.30a-3(c)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)) .

 

  (b)

There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) (17 CFR 270.30a-3(d)) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 3.

Exhibits.

Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)). Filed herewith.

 

14


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant):    Altaba Inc.
By (Signature and Title):   

/s/ Thomas J. McInerney

   Thomas J. McInerney, Chief Executive Officer
Date:    October 31, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title):   

/s/ Thomas J. McInerney

   Thomas J. McInerney, Chief Executive Officer
Date:    October 31, 2018
By (Signature and Title):   

/s/ Alexi A. Wellman

   Alexi A. Wellman, Chief Financial and Accounting Officer
Date:    October 31, 2018

 

15

Grafico Azioni Altaba (NASDAQ:AABA)
Storico
Da Feb 2024 a Mar 2024 Clicca qui per i Grafici di Altaba
Grafico Azioni Altaba (NASDAQ:AABA)
Storico
Da Mar 2023 a Mar 2024 Clicca qui per i Grafici di Altaba