"...management’s philosophy is mainly uncorrelated to the broader market indexes"
Lemelson Capital Management (LCM) has earned a reputation for being successful on both the short and long sides, irrespective of the broader market indexes.
The firm's interim FYE 2019 Amvona Fund, LP investor letter, released in late January 2020 stated:
...some of The Fund’s highest rates of return were achieved on short positions, bearing out once again, that management’s philosophy is mainly uncorrelated to the broader market indexes. In 2020 management believes it will be able to execute investment ideas, in particular, short ideas, more effectively."
Last week as markets plummeted, largely on news of the spreading Coronavirus, shares of Tesla (NASDAQ: TSLA) rocketed higher. LCM began shorting the company on January 21, 2020 and continued shorting through yesterday, with the bulk of the short sales executed late in the day yesterday, February 4, 2020, at an average price per share that day of ~$946.
Tesla is now The Amvona Fund, LP's second-largest (and profitable) short position, behind Advanced Micro Devices, (NASDAQ: AMD), a short position management also significantly increased yesterday and intends to continue to short.
Tesla shares, after peaking yesterday at over $968 per share, began to plunge just after LCM completed its last short sales and shortly before the market closed. Today as the broader market indexes jumped, shares of Tesla continued to collapse, shedding as much as 15 percent of their value in the first hour of trading. Shares of Chipotle Mexican Grill (NYSE: CMG), The Amvona Fund's third-largest short positions, also sank as much as 3 percent.
.@RalphNader says #SEC sh. protect investors in $TSLA. Maybe he'll blame @lemelson, who, after reporting 150% net returns in '19, shorted @Tesla basically at the tophttps://t.co/DmM0wu7ua4@carlquintanilla @Tomwfranck @CNBC @jonfortt @MorganLBrennanhttps://t.co/GgFvjTGQ66— Lemelson Capital (@LemelsonCapital) February 5, 2020
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