Greenhaven Road Capital, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. The Fund returned about -33% in the second quarter, bringing its total decline to approximately -51% in the first half of the year. This has been the U.S. market’s worst start to a year in over a half-century and, unfortunately, the fund’s losses were quite outsized during the period, largely due to its concentrated, long-term bets in growth areas. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Greeenhaven Road Capital mentioned Cellebrite DI Ltd. (NASDAQ:CLBT) and explained its insights for the company. Founded in 1999, Cellebrite DI Ltd. (NASDAQ:CLBT) is an Israel-based digital intelligence company with an $852.4 million market capitalization. Cellebrite DI Ltd. (NASDAQ:CLBT) delivered a -43.89% return since the beginning of the year, while its 12-month returns are down by -56.48%. The stock closed at $4.50 per share on September 13, 2022.
Here is what Greeenhaven Road Capital has to say about Cellebrite DI Ltd. (NASDAQ:CLBT) in its Q2 2022 investor letter:
“Newer holding Cellebrite DI (NASDAQ:CLBT), which is now in our Top 5, enjoys forced buyers and also has a severely compressed multiple. The company is based in Israel and was owned by Japanese company Sun Corporation until, in an effort to highlight Cellebrite’s value, Sun helped take the company public by merging it with a SPAC. (Notably, the SPAC was backed by Adam Clammer, who worked at KKR for more than a decade, founding and leading the Global Technology Group.) Sun did not sell any shares in the process, rolling over all of their equity, a sign of their confidence in the business. The logic for going the SPAC route was to get a U.S. listing and try to get a U.S. multiple for their tech business. The strategy has not worked to date as investor skepticism of Israeli companies and cash-guzzling SPACs is quite healthy. However, in its 20+ years of existence, Cellebrite has never raised capital for growth – it has always been able to self-fund – so this is not a profitless tech company that will be burning cash for the foreseeable future.
Cellebrite’s primary products enable law enforcement to extract and analyze data from cell phones and other electronic devices. As our digital lives and our actual lives converge, accessing digital information becomes critical when solving crimes and building criminal cases. A cell phone holds a range of information, often including data trails for where a person has been (pings to cell towers, geolocation tags on photos, etc.) as well as texts, emails, photos, contacts, social media accounts, search histories, etc. that can help build a very robust profile…” (Click here to see the full text)
Our calculations show that Cellebrite DI Ltd. (NASDAQ:CLBT) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Cellebrite DI Ltd. (NASDAQ:CLBT) was in 15 hedge fund portfolios at the end of the second quarter of 2022, compared to 20 funds in the previous quarter. Cellebrite DI Ltd. (NASDAQ:CLBT) delivered a 0.90% return in the past 3 months.
In February 2022, we also shared another hedge fund’s views on Cellebrite DI Ltd. (NASDAQ:CLBT) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
