180 Degree Capital Corp., an investment management firm, recently released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. This recession has caused investors to move their capital away from risky assets to safer ones. Despite predictions of a return to higher interest rates, the economy has not suffered any major setbacks. Instead, GDP has risen by 3.1%, wages and salaries have grown by 4.7%, real private fixed investment in manufacturing structures has reached record highs, and employment rates remain strong. In the fourth quarter of 2023, there was a positive change in the market as it believes that investors will start to take more risks, including investing in microcapitalization stocks. The Fund’s public portfolio had a gross total return of +6.9%, which was the main reason for the increase in NAV per share from $4.91 to $5.02. For more information on the fund’s top picks in 2023, please check its top five holdings.
180 Degree Capital Corp. featured stocks like The Arena Group Holdings, Inc. (AMEX:AREN) in the fourth quarter 2023 investor letter. Based in New York, New York, The Arena Group Holdings, Inc. (NYSE:AREN) operates digital media platform. On March 5, 2024, The Arena Group Holdings, Inc. (AMEX:AREN) stock closed at $1.8 per share. One-month return of The Arena Group Holdings, Inc. (AMEX:AREN) was 53.85%, and its shares lost 73.13% of their value over the last 52 weeks. The Arena Group Holdings, Inc. (AMEX:AREN) has a market capitalization of $53.061 million.
180 Degree Capital Corp stated the following regarding The Arena Group Holdings, Inc. (AMEX:AREN) in its fourth quarter 2023 investor letter:
“We have been significant shareholders of The Arena Group Holdings, Inc. (AMEX:AREN) since June 2019. AREN is a media company that employs a technology platform that allows creators and publishers to publish and monetize content alongside anchor brands including Sports Illustrated, TheStreet, Parade, Men’s Journal, and HubPages to build their businesses. AREN’s content is distributed across a diverse portfolio of over 265 brands, reaching over 100 million users monthly. Throughout the history of our investment there have been periods where we engaged in constructive activism that resulted in what we believe were improvements in management and corporate governance. The advertising market in 2023 was challenging, but AREN’s business held up better than many other companies.
In November 2023, AREN signed a definitive agreement to merge with Bridge Media Networks, LLC (“Bridge Media”), a media group that includes a portfolio of over-the-air television stations, national television networks, streaming platforms and websites for delivering news, sports, automotive and travel content. Bridge Media is a wholly owned subsidiary of Simplify Inventions, LLC, which is owned by Manoj Bhargava, the founder of 5-hour Energy. Under the terms of the merger, entities associated with Mr. Bhargava will invest $50 million in the combined entity and the consumer brands owned by Mr. Bhargava will commit to approximately $60 million in guaranteed advertising revenue for AREN. Subsequent to the signing of this definitive agreement, Mr. Bhargava purchased the debt and equity of AREN owned by B. Riley and then invested an additional $12 million for working capital purposes while the company seeks the required shareholder and regulatory approvals to complete the merger.
While the start of 2024 has presented additional challenges for AREN, Mr. Bhargava has a history of building significant value across multiple industries. We have had opportunities to speak with both Mr. Bhargava and the new CEO of AREN, Cavitt Randall, and appreciate their candor and desire to build a sustainable business that grows profitably. AREN was the largest source of declines in our portfolio in 2023. We look forward to the completion of the merger in 2024 and to what we believe can be significant value creation under new management led by Mr. Bhargava and Mr. Randall.”
A close up of a laptop screen with a user engaging in the platform’s features.
The Arena Group Holdings, Inc. (AMEX:AREN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, The Arena Group Holdings, Inc. (AMEX:AREN) was held by 4 hedge fund portfolios, up from 3 in the previous quarter, according to our database. In addition, please check out our hedge fund investor letters Q4 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.
