April 12, 2019 

Current Position Performance

Highlights from the Week

Biggest Winner: Tradeweb Markets (TW)

Our newest position, Tradeweb Markets (TW) which only recent IPOed, is also our Weekly Winner with a +14.46% gain. TW provides digitization services to convert trading exchanges that were still using telephone orders (yes, they were calling each other to buy and sell). Profitable right from their IPO, Tradeweb has become the new market darling after Lyft’s (LYFT) IPO left retail investors wondering why we do this at all…

Biggest Loser: Gossamer Bio (GOSS)

Disappointing news from a recent conference combined with a plethora of more-enticing IPO candidates led investors to dump Gossamer Bio (GOSS) this week, causing it to plunge -12.77% and creating a -9.37% loss for the year. We continue to add on the way down but that doesn’t make it any less painful.

Other Highlights

New Age Beverages (NBEV) Goes National

New Age Beverages (NBEV) landed a distribution deal with Wal-Mart (WMT) – more details below – which caused it to pop 40% in a single day. Reality kicked in quickly but, NBEV flipped from being down on the year to gaining +14.41% overall this week and pulling a respectable +8.09% gain for the year.

Yeti (YETI) Goes Abominable On Analysts

Analysts tried to knock Yeti (YETI) down with claims of it being overvalued, but that didn’t stop the stock from gaining +4.56% this week for a Year To Date gain of +110.12%. We are approaching our position with caution, however, as any market pullback will cause Yeti to feel the burn.

This Week’s Trades

Aurora Cannabis (ACB): Adding to Position

After pulling our original capital out of Aurora (ACB) several weeks ago, we dipped our toe back in when the market sold off on Tuesday, adding a small amount back when ACB dropped, buying at $8.80 a share.

ACB closed the week at $27.85 with our position up +138.34%.

EventBrite (EB): Potential Dead Cat Bounce

Although EventBrite (EB) appeared to bottom last week to bounce as high as $21.86 on Monday, we took some profits when EB pulled back on Tuesday at $21.44 just in case last week’s move was a “Dead Cat Bounce.”

As expected, EB made a try to head back to its lows on Thursday, with us adding back to our position at $20.08, effectively lowering our per-share cost to $19.84 from $20.23 where it was prior to Monday’s sell.

EB closed the week at $20.70 with our position up +4.35%.

Gossamer Bio (GOSS): Adding to Position

The sell-off in Gossamer (GOSS) continued this week, and we added to our position when the price dropped at $18.38, $17.08 and $16.88, lowering our per-share cost to $19.14 per share.

GOSS rebounded slightly, closing the week at $17.22 with our position down -10.01%.

New Age Beverages (NBEV): Selling & Buying

Following weeks of an excruciating, seemingly never-ending downhill slide, New Age Beverages (NBEV) caught a big break on Monday when it announced an expanded partnership with Wal-Mart (WMT) to distribute its kombucha products nationally.

While shares rocketed more than 35% in a single trading session, we took profits at $6.23 a share to reduce our per share cost to $5.58 and reduce the position size we’ve been building by Buying in Stages over the past few months. As the adage goes: “Bulls make money, bears make money, and hogs get slaughtered.”

NBEV reached a high of $6.69 a share on Monday before pulling back more than 15% to $5.56 on Wednesday and Thursday where we replaced the shares we sold previously at our new cost basis of $5.58.

The selloff continued into Friday, pushing NBEV under $5.40 at its low – nearly 20% lower than its weekly high – and provides yet another example of how any news – positive or negative – creates huge volatility in the cannabis sector.

NBEV closed the week at $5.48 with our position down -1.79%.

Tradeweb Markets (TW): *New Position*

After the disaster that was the Lyft (LYFT) IPO where underwriters overcharged for the stock, causing it to collapse after its opening (currently down more than -30% from its first trading day high), the markets have been starving for a new alternative and that came last week in the form of Tradeweb Markets (TW).

TW is a fintech provider of Over-The-Counter (OTC) electronic marketplaces with services to address a variety of trading markets including ETFs, treasuries, asset-backed securities and many others, some of whose markets are operating without digitization with orders being made with texts or even phone calls.

Solid fundamentals combined with a fair valuation led Tradeweb to skyrocket, coming public at $34.30 on April 4 and flying nearly +15% over the following four trading days to a high of $39.33 on Monday (April 8). We built a position at $39.50 when TW started consolidating later in the week before moving higher to cross over $43.00 briefly.

While we don’t suggest chasing any stock – particularly IPOs – Tradeweb’s demand combined with the fact that the company is already profitable – unusual in any IPO but particularly those in the fintech sector – made us relax our rules.

Our gameplan from here is to use limit-buy orders set at significantly lower levels than TW’s current pricing and lower than our $39.50 per-share basis.

TW closed the week at $41.87 with our position up +6.00%.

TransEnterix (TRXC): Position Size Reduction

TransEnterix (TRXC) popped more than 6.5% on Wednesday following a release that it plans to present new devices at the upcoming American Gastrointestinal and Endoscopic Surgeons annual meeting.

We took some small profits at $2.49, mainly to reduce our position size and free up capital in case TRXC retests the $2.00 level where we would add more. The sale lowered our per-share cost to $2.41.

TRXC’s pop was extremely short-lived and it trended downward to close the week at $2.23 with our position down -7.24%.

Questions?

As always, If you have questions about how we’re playing different positions or anything at all, really, feel free to leave a comment below!