Here’s Why Bronte Amalthea Fund Shorted Signature Bank (SBNY)

Bronte Capital, an investment management company, released its “Amalthea Fund” first-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund was up 4.92% in March compared to a 3.90% gain for the MSCI ACWI (in $A). In the quarter, Amalthea Fund gained 7.55% versus a 9.23% gain for the benchmark. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Bronte Amalthea Fund highlighted stocks like Signature Bank (OTC:SBNY) in the first quarter 2023 investor letter. Headquartered in New York, New York, Signature Bank (OTC:SBNY) provides commercial banking services. On June 28, 2023, Signature Bank (OTC:SBNY) stock closed at $0.2155 per share. One-month return of Signature Bank (OTC:SBNY) was 78.10%, and its shares lost 99.88% of their value over the last 52 weeks. Signature Bank (OTC:SBNY) has a market capitalization of $13.571 million.

Bronte Amalthea Fund made the following comment about Signature Bank (OTC:SBNY) in its first quarter 2023 investor letter:

“We have been short Signature Bank (OTC:SBNY) for over a year.

While we first noticed its substantial cryptocurrency exposure in 2021, the position’s origin was an article in American Banker from March 2022. To quote:

The volume of assets held by banks on the FDIC’s problem bank list — a tally of banks that received poor ratings from regulators — jumped by about $120 billion in the fourth quarter, according to the agency’s fourth- quarter banking profile released last week. That’s more than triple the previous figure of assets under problem banks, and it’s the highest that asset number has been since the third quarter of 2013.

We did not know whether the new problem assets were one bank with approximately 120 billion in assets or two banks summing to 120 billion in assets. Whatever: if it was one bank there was only one bank it could be—which was Signature Bank. No other bank was within 10 billion dollars of the required 120 billion. Regardless, we began digging…” (Click here to read the full text)

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Signature Bank (OTC:SBNY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held Signature Bank (OTC:SBNY) at the end of first quarter 2023 which was 33 in the previous quarter.

We discussed Signature Bank (OTC:SBNY) in another article and shared Akre Focus Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.