Cooperman’s Omega Advisors: Citigroup Out, PayPal In

In a move that casts a negative light on the traditional banking industry and gives mobile and online payment systems a little extra credibility, recent moves emerged from Leon Cooperman’s Omega Advisors.

Though the Advisors picked up shares in several firms, while also dropping some familiar names, the biggest one for us was that it dissolved shares of Citigroup while increasing holdings in PayPal.

Cooperman’s Omega Advisors dissolved three million shares in Citigroup, which accounted for about 3.4 percent of the fund’s overall holdings.

In the meantime, it picked up 1.3 million shares of PayPal, suggesting that Omega Advisors may have a doubt or two about traditional banking’s ability to fend off online and mobile payment sources in the long term.

Interestingly, Omega Advisors also picked up a 227,000 share stake in Apple, but sold the position since. It also cut share counts in both Facebook and Alphabet—new parent company of Google—stock, suggesting that it’s not universally looking for tech to rule the field to come.

These results have to be taken with something of a grain of salt, of course. We’re talking about a large scale and a wide-scope operation, which deals in large numbers of companies across several different industries.

However, to notably increase the stake in a mobile payments firm while lowering the stake in a traditional banking firm at the same time is a noteworthy move.

It could be part of standard portfolio rebalancing efforts. It could be a commentary specifically on these two firms.

It could also be a general assessment of the market, which seems to be shying away from the hidebound, location-based banking system and moving toward the digital equivalent.

This may not be as big a deal as it could be, as there are several potential explanations for what’s being seen. However, what’s being seen is still going on, so we should ignore this at our own peril.