Below we’ll examine why Anna Nikolayevsky Is Selling Off Roblox and These 4 Stocks. For our methodology and a more comprehensive list, please see Anna Nikolayevsky Is Selling Off Roblox and These 9 Stocks.
5. Roblox Corporation (NYSE:RBLX)
Former Value of Axel Capital Management‘s 13F Position: $8.77 million
Number of Hedge Fund Shareholders (as of March 31): 40
Anna Nikolayevsky’s Axel Capital Management sold off its 85,000 shares of Roblox Corporation (NYSE:RBLX) during the first quarter, removing the stock from its 13F portfolio a year after initially adding it. There was a significant hedge fund exodus from the mobile game developer’s stock in Q1, as 34% of former hedge fund shareholders sold it off during the quarter.
Roblox Corporation (NYSE:RBLX) shares have crumbled by 73% this year as bookings for the company’s eponymous mobile game have dried up even as its active user base continues to grow at a strong clip. Bookings fell by 3% year-over-year to $631.2 million in Q1, and though revenue grew by 38% to $537.1 million, the company’s GAAP net loss also widened to $160.2 million, or $0.27 per share.
Even with pandemic restrictions having faded considerably in many parts of the world, Roblox Corporation (NYSE:RBLX) did experience strong Q1 growth in its active user base and hours of engagement. The former grew by 28% year-over-year to 54.1 million, while the latter grew by 22% to 11.8 billion.
While user growth and engagement remains strong, it nonetheless appears that hedge funds aren’t convinced that Roblox will be able to maintain the same level of financial commitment from those players now that they have a wider array of entertainment and activity choices to spend their money on in 2022 and beyond.
4. Meta Platforms, Inc. (NASDAQ:META)
Former Value of Axel Capital Management‘s 13F Position: $8.98 million
Number of Hedge Fund Shareholders (as of March 31): 204
Anna Nikolayevsky’s hedge fund also unloaded another metaverse-related stock in Q1, the one-and-only Meta Platforms, Inc. (NASDAQ:META). After nearly tripling the size of its META stake during Q4, the fund reversed course and sold off its entire position of 26,700 shares during Q1.
Other hedge funds have likewise been bailing on Meta Platforms, Inc. (NASDAQ:META) in recent quarters ahead of the company’s disastrous Q1 results, as hedge fund ownership of META fell for the third-straight quarter in Q1 and has declined by 26% during that time.
Meta Platforms, Inc. (NASDAQ:META)’s metaverse initiatives lost an obscene amount of money during the first quarter. Even worse, the hypothetical fruits that were set to result from those costly endeavors aren’t even ripening as expected, as the company has delayed or outright scrapped several metaverse-related developments. Among that list are its planned smartwatch being canceled, and its Project Navare virtual reality glasses being postponed beyond 2024.
3. Coinbase Global, Inc. (NASDAQ:COIN)
Former Value of Axel Capital Management‘s 13F Position: $11.11 million
Number of Hedge Fund Shareholders (as of March 31): 46
Axel Capital Management sold off nearly half of its Coinbase Global, Inc. (NASDAQ:COIN) position during Q4 of 2021 and unloaded its remaining 44,000 shares during Q1. Overall hedge fund ownership of COIN slumped by 19% during Q1.
With the crypto market hitting a rough patch and activity on its digital NFT marketplace stagnating, Coinbase Global, Inc. (NASDAQ:COIN) has had to significantly alter its planned growth trajectory. The company, which at one point planned to triple its workforce in 2022, announced a hiring freeze and even the rescinding of job offers in May. This month it went a major step further, slashing 18% of its workforce.
Coinbase Global, Inc. (NASDAQ:COIN)’s profitability fell off a cliff during Q1, as net income fell by more than $1 billion year-over-year, amounting to a loss of $430 million. Things project to be even worse in Q2, despite the layoffs, as the crypto market has cooled even further. While COIN shares are down by 80% over the past six months, shares are likely to fall further until the crypto market rebounds considerably.
2. Silvergate Capital Corporation (NYSE:SI)
Former Value of Axel Capital Management‘s 13F Position: $11.18 million
Number of Hedge Fund Shareholders (as of March 31): 35
Silvergate Capital Corporation (NYSE:SI) is another crypto-related stock that Anna Nikolayevsky unloaded during Q1, though one on a much different trajectory than Coinbase. The hedge fund manager made a huge investment in the crypto bank during Q4, raising her stake in the company by 655% to make it her third-largest position. However, she unloaded the entire stake during Q1.
Like Coinbase, Silvergate Capital Corporation (NYSE:SI) experienced a significant decline in cryptocurrency trading volumes during Q1, which fell by 60% from a year earlier. Unlike Coinbase, Silvergate Capital’s other services were able to more than offset the weakness in its crypto trading volumes.
Most notably, Silvergate Capital Corporation (NYSE:SI)’s loan product, SEN Leverage, nearly doubled in its commitments to $1.07 billion during the quarter, a greater than 400% increase year-over-year. Thanks to the majority of its loans having floating interest rates, the company’s net interest income also benefited greatly from rising rates, growing by 84% year-over-year to $50.5 million.
1. Unity Software Inc. (NYSE:U)
Former Value of Axel Capital Management‘s 13F Position: $13.63 million
Number of Hedge Fund Shareholders (as of March 31): 39
Closing out the list of Anna Nikolayevsky’s most prominent sells of Q1 is Unity Software Inc. (NYSE:U), which ranked as her second-largest stock holding as of December 31. By the end of Q1 the position had been unloaded. Shares of Unity, which also has a footprint in the metaverse, have lost 76% of their value in 2022.
Despite strong Q1 results, Unity Software Inc. (NYSE:U) downgraded its full-year revenue projections by as much as $135 million, blaming a couple of unforeseen but temporary issues related to its ad monetization platform Operate. CEO John Riccitiello expects most of those issues to be resolved by the end of Q3 and for the company to return to 30%+ growth rates in the years to come.
The ClearBridge Investments All Cap Growth Strategy took the opposite approach to Axel Capital Management during Q1, buying into the weakness in Unity Software Inc. (NYSE:U)’s shares to grow its position in the company. It had this to say about Unity Software in its Q1 2022 investor letter:
“We took advantage of a correction in higher-multiple stocks early in the first quarter to purchase shares of Unity Software (NYSE:U), a leading platform to create, run and monetize 3D content. With about 1.6 million monthly active creators versus roughly 15 million potential content creators in gaming alone, we believe the company’s Create Engine is still underpenetrated relative to its core addressable market. We similarly see a long runway for growth in Unity’s Operate Solutions segment given its advertising network commands single-digit share of the $60 billion mobile app install ad market today. Furthermore, we believe Unity is well-positioned to expand its addressable market to include industries beyond gaming, on both the operate and create sides of their business (Exhibit 1). The company is not yet free cash flow positive but given strong net expansion rates and high gross margins, we see a path to improving profitability over time, with management notably targeting positive free cash flow this fiscal year.”
For more on the latest trades made by some of the biggest hedge fund managers in the world, check out 12 Best American Stocks To Buy in 2022 and Michael Burry Is Selling These 5 Stocks.
Disclosure: None.
