Lakewood’s Anthony Bozza Recommended Shorting Three Pot Stocks at Robin Hood
Joshua Fineman, 30 October 2018
(Bloomberg) — Lakewood Capital Management LP’s Anthony Bozza recommended shorting Tilray Inc., Canopy Growth Corp., and Aurora Cannabis Inc. at the Robin Hood Investors Conference in New York City, according to a person with knowledge of the presentation. Two of these companies, Canopy Growth and Aurora Cannabis, were named new shorts by Lakewood in their fourth-quarter letter to clients in January.
Bozza said that it’s not a matter of if, but when these pot stocks collapse. Tilray shares have reversed about 9 percent for the day’s peak, turning negative around the same time that Bozza was scheduled to present at RobinHood.
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LAKEWOOD: SHORT CELLTRION AND SNOOP-DOGG BACKED WEED FIRM
ValueWalk, 29 January 2018
Lakewood Capital Management, the mutl billion dollar hedge fund led by Anthony Bozza, is calling the top of the marijuana stock boom. The firm revealed short positions in two major cannabis companies in its full-year and fourth quarter letter to investors, a copy of which has been reviewed by ValueWalk. The Lakewood hedge fund is short Canopy Growth, and Aurora Cannabis as Bozza and team believe that these pot stocks are highly overvalued and trade no nothing more than hot air.
One Of The Last Remaining Short Only Hedge Funds Warns Of Risk Parity “Liquidity Crash”. “Heading into the final months of 2017, each of these public companies sported market capitalizations that were nearly impossible to rationalize” the letter notes, “but nonetheless, the stocks saw their values more than triple in just a few short weeks around year-end as focus turned to the legalization of recreational marijuana in California on January 1, 2018” it continues.
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Hedge fund says cannabis stocks will either collapse or we should all move to Canada and grow pot
Leslie Picker, 25 January 2018
A multibillion-dollar hedge fund is not high on marijuana stocks. Lakewood Capital Management, led by Anthony Bozza, revealed short positions in Canopy Growth (: CGC-CA) and Aurora Cannabis (Toronto Stock Exchange: ACB-CA) , according to the firm’s fourth-quarter investor letter sent Wednesday and obtained by CNBC. The firm has about $5 billion in assets under management. “It has been hard to come across a retail investor rag or stock blog without hearing about some way to play this theme, and countless web sites are now devoted to investing in this exciting industry,” Bozza wrote.
“Despite recent mania around the legalization of recreational pot in California, there is a little problem: none of these companies sell at all into California (or anywhere else in the U.S. for that matter), since that would, of course, be illegal.” Bozza notes that much of the “appeal” surrounding these stocks recently stems from “regulatory momentum, constant press coverage, growing public acceptance, an absence of large incumbents and an enormous, rapidly expanding market opportunity.” But, he adds, that the barriers to entry for the industry are very low and that the number of licensed producers in Canada is growing rapidly. Bozza estimates that Canopy Growth’s production capacity can be recreated for less than 150 million Canadian dollars and Aurora’s for CA$100 million.
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LAKEWOOD CAPITAL 1Q16 LETTER TO PARTNERS: FOUR SHORT IDEAS
ValueWalk, 10 May 2016
In the quarter ended March 31, 2016, the Lakewood Capital fund recorded a net loss of 0.9%. At quarter end, the fund’s equity exposure was 77.0% long and 44.0% short for a net equity exposure of 33.0%. In addition, the fund was 4.0% long and 0.2% short fixed income securities for a net fixed income exposure of 3.8%.1 The top five positions constituted 23.4% of equity capital and the top ten positions constituted 41.0% of equity capital.
The Lakewood Capital fund generated a net loss of 0.9% in the quarter. Although the fund’s long and short positions on average ended the quarter in roughly the same place they began, the start of 2016 was one of the most volatile and tricky periods we have seen in years as underscored by a 16% mid-quarter decline in the Russell 2000 Index. Defensive sectors like consumer staples, telecommunications and utilities performed very well in the quarter as record low interest rates pushed investors to bid up shares in companies they perceive generate stable cash flows while most other sectors languished. Long equity positions generated a -1% return on capital, hedged long equity positions generated a -5% return on capital, short equity positions generated a +1% return on capital and fixed income positions generated a +2% return on capital.
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