Billionaire James Packer bets on energy after selling entire Flutter holding

Has James Packer’s investment strategy taken a turn for the boring?

Is James Packer pivoting back away from gambling stocks and towards shares in boring defensive energy shares? Surely not.

And yet he is, sort of. The latest investment filings from Packer’s US investment vehicle, Consolidated Press International Holdings, show he’s dumped his entire holding in Flutter – the owner of gambling app Sportsbet – which is under increasing pressure through competition from start-ups such as Kalshi and Polymarket, which started life as platforms offering election wagering, but have rapidly found popularity with sports fans.

In June Packer was holding around $193m worth of shares in Flutter. These days, not a single share.

But he’s not completely out of gambling shares, topping up his holding in gaming software firm Light & Wonder.

We’re guessing that’s on the expectation of a rerating for the Light & Wonder after the company ditched its listing on the crowded NASDAQ exchange this month in favour of a single listing on the ASX, where it will compete head-to-head with Aristocrat Leisure. Competition is a lot more fun if you think you’re going to win.

Packer also ditched small shareholdings in Cloudflare and Morningstar in the quarter, winnowing down CPI’s holdings, but retains stock in e-commerce companies such as Spotify, Monday.com, Duolingo, Snowflake, Block, Cloudflare, Datadog, Shopify and Procore Technologies.

But the big move of the quarter was taking a $150m stake in US utility NRG Energy, which joins equipment manufacturer GE Vernova as Packer’s energy investments.

Is Packer pivoting to the dull? Perhaps, though his investment in GE Vernova has been a cracker, with the stock up some 70 per cent this year.

And there’s probably another call at play, given Packer had a cracking 2024 riding the AI wave before it was a bubble.

NRG is best known in Australia – if it is known at all – as the part-owner of the Gladstone coal-fired power plant in Queensland, which supplies the energy for Rio Tinto’s aluminium smelter in the regional city. But with Rio looking to re-power the plant with renewable energy by the end of the decade, NRG is reportedly looking to sell.

But in the US it’s also been on a tear this year, as it looks to build new gas-fired power plants in Texas. Where the data-centre boom has been building in earnest, driving the state’s power needs.

The billionaire has ditched the bulk of his tech stock holding that led to the 2024 resurgence – companies such as Meta and Amazon and chipmaker Taiwan Semiconductor Manufacturing Company, and the bulk of his holding in Nvidia.

But even if the AI bubble bursts, the data centres that have already been built still suck a lot of power, and the smart money always knows that infrastructure is the place to be when speculators exit.