180 Degree Capital Corp., an investment management firm, recently released its first quarter 2024 investor letter. A copy of the letter can be downloaded here. In March, despite the market sell-off, the fund achieved a +4.7% gross total return from its cash and public-related securities, leading to a 2.8% gain in the NAV to $5.16. The firm believes that the economy will continue to show resilience, and its portfolio companies do not require lower rates to create value for shareholders. They benefit from positive economic trends and activism across many holdings. For more information on the fund’s top picks in 2024, please check its top five holdings.
180 Degree Capital Corp. highlighted stocks like The Arena Group Holdings, Inc. (AMEX:AREN), in the first quarter 2024 investor letter. The Arena Group Holdings, Inc. (AMEX:AREN) operates digital media platform. The one-month return of The Arena Group Holdings, Inc. (AMEX:AREN) was 13.51%, and its shares lost 80.00% of their value over the last 52 weeks. On May 29, 2024, The Arena Group Holdings, Inc. (AMEX:AREN) stock closed at $0.84 per share with a market capitalization of $24.864 million.
180 Degree Capital Corp. stated the following regarding The Arena Group Holdings, Inc. (AMEX:AREN) in its first quarter 2024 investor letter:
“The Arena Group Holdings, Inc. (AMEX:AREN): AREN defaulted on its contractual payments to ABG related to its Sports Illustrated license, which resulted in ABG giving AREN notice that it was cancelling the license. Subsequent to the end of Q1 2024, ABG signed a new agreement to run SI with Minute Media. AREN was also served with lawsuits from ABG and former management. In Q2 2024, representatives from AREN held a conference call during which they reiterated the expectation of driving to a close of the transaction between AREN and Bridge Media, albeit without providing financial estimates on what the go-forward business looks like without Sports Illustrated in terms of financial performance.
We have a hard time making an investment case for AREN until the merger with Bridge Media closes and the company provides clarity on its financial operating model. We started out optimistic about the deal, and as is customary for large holders in public companies, we agreed to sign a voting agreement at the request of Bridge Media and its parent company, Simplify Investments. To be perfectly honest, the team at Simplify hasn’t listened to any of our suggestions, and the arrogance under which they have operated has exposed false assumptions and complete naivety with regards to the public markets and AREN’s partners. While we think the business can be run more efficiently and profitably than in years past, it is incumbent on the new team to get its act together and understand AREN is a public company with stockholders other than Simplify, and is not some pet private business where public market rules do not apply.
For the quarter, AREN decreased NAV by $0.12/share, or $1.2 million.”
A crowded esports arena with a team competing in an online network.
The Arena Group Holdings, Inc. (AMEX:AREN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held The Arena Group Holdings, Inc. (AMEX:AREN) at the end of the first quarter which was 4 in the previous quarter.
The merger between Bridge Media and Arena Group Holdings, Inc. (AMEX:AREN) was announced, and it is anticipated to close shortly. In addition, please check out our hedge fund investor letters Q1 2024 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.