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Mutual Funds Sell Airbnb, DocuSign Shares

Mutual funds sold shares in Airbnb, DocuSign and Palantir over the past nine months, at prices below the companies’ most recent valuations, securities filings show. The sales may be a sign that the funds are cooling on some investments after rushing into the sector in previous years.

It also challenges the idea that mutual funds buying into private tech firms are doing so for the long term. It’s very rare for mutual funds to sell private tech stock before a company goes public or is acquired, when the investment generally becomes much more valuable. But some brokers say they’ve noticed a few more examples than usual of mutual funds trying to sell this year. In some of these cases, the funds had held the stock for only a year or two before selling.

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In some cases, the sales appear to accurately reflect what the companies are worth on the secondary markets. In the case of DocuSign’s stock sale, the prices were fairly close to what other DocuSign stock is fetching, brokers said. Shares of the company, which has weathered executive departures and difficulty hiring a new CEO, have traded hands in the last few months at around $15 per share, according to brokers, the price at which the mutual funds sold. DocuSign shares traded higher about a year ago, said Jared Carmel, managing partner at secondary markets firm Manhattan Venture Partners, in part because the company was reluctant to approve secondary stock sales that were below roughly $16 per share. The company has since loosened those restrictions, allowing trades to happen at lower prices, which has made it easier for employees to cash out some of their stock holdings, Mr. Carmel said. DocuSign did not respond to requests for comment.

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Airbnb bought the stock back from the investors in a deal driven by the sellers’ needs.