Anna Nikolayevsky Is Selling Off Roblox and These 4 Stocks

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.

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