City Different's Q2 letter blames the U.S.-Iran ceasefire for Tidewater's 7% slide, but says the offshore vessel supply-demand outlook remains favorable.
Tidewater shares slid 7% in the month after the U.S.-Iran ceasefire in June, according to City Different Investments' Q2 2026 investor letter. The fund called the offshore vessel owner its biggest detractor for the quarter, blaming the diplomatic deal for deflating energy and shipping stocks.
Tidewater closed at $78.09 on July 21, giving it a market cap of $3.88 billion. The one-month decline erased some of the 35.75% gain the stock had posted over the prior 52 weeks. City Different, which runs concentrated global equity portfolios, said it still sees a favorable multi-year supply-and-demand picture for offshore vessels despite the ceasefire-driven pullback.
The firm's Focused Global strategy returned 7.08% in Q2, and its Global Equity strategy returned 5.36%, both trailing the MSCI All Country World Index's 14.93% gain. The underperformance was largely tied to Tidewater's drop, City Different wrote.
"The U.S.-Iran ceasefire in June let the air out of energy and shipping stocks," the fund said, "but we believe that the multi-year supply-and-demand outlook for offshore vessels remains favorable."
Tidewater provides tugboats and supply vessels to the offshore energy industry. At the end of the first quarter, 31 hedge funds held positions in the stock, down from 36 three months earlier. The fund's letter did not disclose whether it still owned the shares at the end of Q2.
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