There are many investment vehicles beyond just stock market investing. We hear the names of some of these enough to think we know exactly what they are, but we often realize when asked that we have a hard time defining them. I experienced this recently with a financial adviser I know that was asked what a hedge fund is. She knew that it was a pooled fund (more than one investor) and that it may involve complex strategies that require people to be an accredited investors in most cases, but the Series-7 licensed advisor doesn’t spend much time with alternative investments, so her answer was left incomplete.
There are many hedge fund types all with different strategies; in fact it is a wide-open field. Michael Burry proved this as he created his own way to sell short the subprime mortgage market for his hedge fund before the mortgage meltdown in 2008. So there is no shame in not knowing what a hedge fund is, the strategies are limitless. I referred to the SEC website and spoke with several hedge fund managers I interact with regularly to ensure there were no important gaps missing while writing a hedge fund refresher.
What is a Hedge Fund?
Hedge funds are investment vehicles that pool money from investors with the goal of generating positive returns. They differ from mutual funds in that they typically employ more flexible investment strategies. Many hedge funds aim to profit in various market conditions by engaging in practices such as leverage (borrowing to increase investment exposure), short-selling, and other speculative investment techniques that are less commonly used by mutual funds.
There are a number of different types of hedge funds, each with its own unique strategy. Some of the most common include:
• Long-Short Equity Funds: These are funds that invest in both long and short positions, meaning they buy stocks they believe will go up in value and sell stocks they believe will go down in value. The balance of the long and short, in theory, moderates risk in the management of many long-short equity funds.
• Market Neutral Funds: These are funds that look to generate returns for investors that are not correlated to the overall market. They do this by investing in a variety of assets, including stocks, bonds, and derivatives. A market-neutral fund that adapts to any market condition by selecting positions for what is expected in the various markets allows the manager much more leeway than most mutual funds available.
• Volatility Arbitrage Funds: These funds take advantage of volatility arbitrage which is a trading strategy that attempts to profit from the difference between the forecasted future price volatility of an asset, like a stock, and the implied volatility of options based on that asset. Success at calling the disconnect between the two that yields a profit (arbitrage) is the goal of these fund managers.
• Merger Arbitrage Funds: These funds trade to benefit from the common price movement experienced when a company announces a merger or acquisition of another public company. Usually, the acquiring company’s price will weaken while the company to be acquired rises. Benefiting from both sides while offsetting overall market risk being both long and short in equities, is how these funds aim to outperform the overall market.
• Global Macro Funds: are what many investors think of when it comes to hedge funds. The manager can take a view on economic or political events and use derivatives on equities, bonds, currencies and commodities to try to profit from that view. Global macro hedge fund managers may be taking positions on the likely direction of interest rates, the outcome of a significant event, such as a vote to raise the U.S. debt ceiling or anything where they consider the market as not pricing an outcome correctly.
Depending on the size of the assets managed by a hedge fund manager, they may not be required to register or file public reports with the SEC (Securities and Exchange Commission). However, hedge funds are still subject to anti-fraud regulations, and fund managers have a fiduciary duty to the funds they manage.
Who Can Invest?
Hedge funds are generally only accessible to accredited investors, meaning investors who have a net worth of at least $1 million or an annual income of at least $200,000. (there are other criteria that may allow access). This is because hedge funds are considered by the SEC to be high-risk investments.
If you are considering investing in a hedge fund, it is important to do your research and understand the risks involved. You should also make sure that you are comfortable with the investment strategy of the fund.
Downsides Commonly Associated With Hedge Funds
While every fund is unique, there is much overlap in the different types when it comes to the downside associated with many of the varieties. Remember the goal for most of these funds is to make above-market returns – greater returns usually come with a cost.
• High Fees: Hedge funds typically charge high fees, which can eat into your returns.
• High Risk: Hedge funds are considered to be high-risk investments. They can lose money, even in rising markets.
• Lack of Liquidity: Hedge funds are typically illiquid, meaning it can be difficult to sell your shares if you need to.
If you are considering investing in a hedge fund, it is important to weigh the risks and rewards carefully. Hedge funds can be a good investment for investors who are looking for high returns and diversification. However, they are also high-risk investments and should only be considered by investors who can’t afford to lose their investment.
Evaluating Various Funds
If you’re considering investing in a hedge fund, there are several key areas of information you should seek:
Read the fund’s offering memorandum and related materials: These documents provide essential information about the fund’s investment strategies, its location (U.S. or abroad), risks associated with the investment, fees charged by the manager, expenses borne by the fund, and potential conflicts of interest. It is crucial to thoroughly review these materials before making an investment decision and consider consulting an independent financial advisor.
Understand the fund’s investment strategy. Hedge funds employ a wide range of investment strategies. Some may diversify across multiple strategies, managers, and investments, while others may focus on concentrated positions or a single strategy. It’s important to grasp the level of risk involved in the fund’s strategies and ensure they align with your investment goals, time horizon, and risk tolerance. Remember that higher potential returns usually come with higher risks.
Determine if the fund uses leverage or speculative investment techniques: Leverage involves borrowing money to amplify investment potential, but it also increases the risk of losses. Hedge funds may also use derivatives (such as options and futures) and engage in short-selling, which further impact potential gains or losses. Understanding these practices is crucial in evaluating the fund’s risk profile.
Evaluate potential conflicts of interest disclosed by hedge fund managers: It’s important to assess any conflicts of interest that may arise. For instance, if your investment advisor recommends a fund they manage, there may be a conflict since the advisor may earn higher fees from your investment in the hedge fund compared to other potential investments.
Understand how the fund’s assets are valued. Hedge funds may invest in illiquid securities that can be challenging to value. Some funds exercise significant discretion in valuing such securities. It’s essential to understand the fund’s valuation process and the extent to which independent sources validate the valuation. Valuation practices can affect the fees charged by the manager.
Understand that hedge funds do not follow a standardized methodology for calculating performance, and their investments may involve relatively illiquid and hard-to-value securities. In contrast, mutual funds have specific guidelines for calculating and disclosing performance data. When presented with performance data for a hedge fund, inquire about its accuracy, including whether it reflects cash or actual assets received by the fund, and whether it accounts for deductions for fees.
There are ordinarily limitations on taking money out of the fund. Unlike mutual funds, hedge funds typically impose restrictions on redeeming (cashing in) shares. These are usually monthly, quarterly, or annual redemption windows. They may also impose lock-up periods, during which you cannot redeem your shares for a year or more. These limitations mean that the value of your shares can decrease during the redemption process, and redemption fees may apply.
Why Hedge Funds are Popular
The lure of possibly finding a hedge fund manager with a crystal ball is a nice fantasy, but dreaming aside, hedge funds are popular among investors for a number of other reasons.
First, hedge funds have the potential to generate higher returns than traditional investments, such as mutual funds. Second, hedge funds offer investors the opportunity to diversify their portfolios and reduce risk. Third, hedge funds, although not as liquid as SEC-registered mutual funds, are typically more liquid than other alternative investments, such as private equity.
Take Away
Hedge funds offer accredited investors a unique opportunity to potentially earn returns through diverse investment strategies not found in traditional mutual funds. With their focus on generating profits regardless of market direction, hedge funds have become popular due to the potential for higher returns, diversification benefits, customization, and access to unique investment opportunities. However, it is important for investors to thoroughly understand the risks involved, carefully evaluate fund managers, and consider their own investment objectives before considering hedge fund participation.
Sandy Breland Named Gray’s Chief Operating Officer
May 22, 2023 07:00 ET|
ATLANTA, May 22, 2023 (GLOBE NEWSWIRE) — Gray Television, Inc. (“Gray”) (NYSE: GTN) promoted Sandy Breland from Senior Managing Vice President to the role of Executive Vice President and Chief Operating Officer, effective today. Sandy succeeded Bob Smith, who recently retired after a long career with Gray in various capacities.
“Sandy has vast talents and experience in leading local news-focused operations that have earned her enormous respect within Gray and throughout our industry,” explained Gray’s Executive Chairman Hilton H. Howell. “She is the natural choice to lead Gray’s unique portfolio of leading television stations, and we are thrilled to announce her promotion as our new Chief Operating Officer.”
In early 2019, Sandy joined Gray as a Senior Vice President of Local Media upon Gray’s acquisition of Raycom Media, where she served as a Group Vice President. In her current role, she has overseen a portfolio of television stations and local digital platforms in 16 markets as well as Gray’s Washington DC News Bureau, its National Investigative Unit, and news support services for all markets. Last year, she assumed oversight of Recruiting and Gray’s new in-house News Research and Consulting operation. Sandy also has oversight of InvestigateTV, a weekly program airing across Gray’s stations.
Sandy has over 30 years of experience in local broadcasting and has received some of the industry’s highest honors. Her career has included General Manager of WVUE-TV (Fox) in New Orleans, Louisiana, and WAFB/WBXH in (CBS/MyNetwork) Baton Rouge, Executive News Director of KTVK-TV (Arizona’s Family TV3) in Phoenix, Arizona, and Executive News Director of WWL-TV (CBS) in New Orleans.
Sandy was honored with a Peabody and an Edward R. Murrow award for her planning and execution of Hurricane Katrina coverage during her time at WWL-TV. She proudly serves on the Board of Directors for the Carole Kneeland Project for Responsible Journalism. Sandy is a recipient of the RTNDF’s First Amendment Award and the Society of Professional Journalists’ Sigma Delta Chi Award for public service. In addition to a Bachelor’s in Journalism from Loyola University-New Orleans, she has attended continuing education sessions at Columbia University’s Sulzberger Leadership Program, Missouri University’s Management Program for Broadcast Professionals, and the Poynter Institute.
About Gray:
Gray Television, Inc. is a multimedia company headquartered in Atlanta, Georgia. Gray is the nation’s largest owner of top-rated local television stations and digital assets in the United States. Its television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the top-rated television station and 102 markets with the first and/or second highest rated television station. It also owns video program companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios. Gray owns a majority interest in Swirl Films. For more information, please visit www.gray.tv.
Gray Contact
Hilton H. Howell, Jr., Executive Chairman and Chief Executive Officer, 404-266-5513
Pat LaPlatney, President and Co-Chief Executive Officer, 334-206-1400
Jim Ryan, Executive Vice President and Chief Financial Officer, 404-504-9828
Kevin P. Latek, Executive Vice President, Chief Legal and Development Officer, 404-266-8333
Basics for Individuals Looking to Use Futures in Investing
Should you use futures in investing your portfolio? Futures trading can be an exciting and potentially lucrative investment opportunity for those who are willing to assume the risks involved. The contracts allow investors to trade a wide range of assets, from commodities like oil and gold to financial instruments like stock indices and currencies. Below we’ll explore what futures trading is, what types of assets are traded in the futures market, the advantages and disadvantages of futures trading, and what beginners should know about trading platforms and the Chicago Mercantile Exchange (CME).
Background
Futures were originally designed to allow buyers and sellers of raw materials to lock in a price and know their future costs to avoid being impacted by factors affecting the commodity’s price, like weather. The market later grew to help other businesses, such as utilities and airlines, hedge against unknown fuel costs – and the products continue to expand today. Currently, futures are being used by all manners of investors, speculators, and those that want to hedge against the risk of future cost spikes.
This has made for deep markets, the trading volume in futures contracts, is now often a multiple of the trading of the underlying physical assets. This is the case with oil futures contracts. The addition of professional and individual investors and speculators has dramatically increased trading volume. This helped make the financial products extremely liquid compared to when they just functioned as insurance against manufacturing price risk.
It is no surprise, then, that many speculators are drawn to futures trading, both for the potential of outsized profits and the ability to have exposure to assets that may otherwise not be accessible to the investor.
What is Futures Trading?
A futures contract is an agreement to buy or sell an asset at a specified price and time in the future. Futures contracts are traded on organized exchanges, such as the CME, which provide a platform for buyers and sellers to trade contracts. Unlike stocks or bonds, futures contracts are derivative products, meaning that their value is derived from the underlying asset. The underlying asset can be a physical commodity, such as gold or oil, or a financial instrument, such as a stock index or a currency.
Terms Used in Futures Trading
Before making any transaction, especially investing in futures contracts, it is critical to understand some of the most used key terms in futures trading:
Contract Size: The amount of the underlying asset covered by one futures contract.
Contract Expiration: The date when the futures contract expires.
Margin: The amount of money an investor must deposit to buy or sell a futures contract.
Settlement: The process of fulfilling the terms of a futures contract by exchanging the underlying asset or its cash value.
Types of Assets Traded in the Futures Market
As mentioned earlier, there continue to be new types of futures contracts being brought to market. The futures market offers a wide range of assets that can be traded through futures contracts. Some of the more commonly traded assets among self-directed traders include:
Commodities: Futures contracts are frequently used to trade commodities like crude oil, gold, silver, and agricultural products like wheat and corn.
Financial Instruments: Futures contracts are also used to trade financial instruments like stock indices, bonds, and currencies.
Advantages and Disadvantages of Futures Trading
Like any investment opportunity, futures trading has its advantages and disadvantages. Here are a few of the key advantages and disadvantages of investing in futures contracts:
Advantages:
Leverage: Futures contracts offer investors the ability to leverage their investment, meaning that they can control a larger amount of the underlying asset with a smaller amount of capital.
Diversification: Futures contracts provide investors with a way to diversify their portfolio by investing in a wide range of assets.
Liquidity: The futures market is highly liquid, meaning that investors can easily buy and sell contracts without impacting the market.
Disadvantages:
Risk: Futures trading is a highly speculative investment opportunity and involves significant risk. A futures position can also quickly turn against you – the high leverage could make matters worse this is because margin magnifies both profits and losses.
Complexity: Futures trading can be complex and requires a good understanding of the underlying asset and market conditions. Often there are factors that impact price movements that are well beyond the ability of an individual to account for.
Costs: Futures trading can be expensive, while commissions on future trades are very low and are charged when the position is closed, usually as low as 0.5% of the contract value, the spread between the bid and offer may be wide which could impact costs when it’s time to close out the position.
What is the CME?
The Chicago Mercantile Exchange, or The Merc is one of the largest and most well-known futures exchanges in the world. It offers a platform for trading futures contracts on a wide range of assets, including commodities, financial instruments, and currencies. The CME also provides a range of resources for investors, including market data, trading tools, and educational materials.
What Should Self-Directed Investors Look for in a Trading Platform?
Self-directed investors who are interested in trading futures contracts should look for a trading platform that doesn’t limit their growth as a trader. As such it should offer a range of broad range features and resources. Here are a few key features beginner futures traders look for:
Easy-to-use interface: Auser-friendly interface can make it easier for investors to navigate the trading platform and place trades. A complex and confusing interface can make it difficult for investors to execute trades quickly and efficiently, which could result in missed opportunities or costly mistakes. If you are currently using a platform for stock trading, see if they have ample futures capabilities. At times, comfort and familiarity navigating a platform can make all the difference.
Mobile compatibility: Many investors prefer to trade on-the-go using their mobile devices. A good trading platform should be compatible with mobile devices, allowing investors to monitor their trades and make trades from anywhere with an internet connection.
Access to market data: This would seem basic, but access to real-time market data, including price quotes, charts, and news feeds, is essential. This information can keep you looking at what is occurring now, not 20 minutes ago before a market-moving economic report was released.
Advanced order types: The ability to place advanced order types, such as stop-loss and limit orders, can help investors manage their risk and control their trades more effectively.
Educational resources: Futures trading can be complex and requires a good understanding of the underlying asset and market conditions. A good trading platform should provide investors with access to educational resources, such as articles, tutorials, and webinars, to help them learn about futures trading and stay up-to-date on market trends.
Commission and fees: Trading fees can add up quickly and eat into profits. It is important to choose a trading platform that offers competitive commission and fees, without sacrificing the quality of service or features offered.
Take Away
Investing in futures contracts has developed to include many different underlying asset types. It has also become much easier for the individual and average investor to be involved. The leverage magnifies moves, this can be a high-risk, high-reward trading experience.
Before investing, it is important to understand the risks and benefits of futures trading, as well as the key terms and concepts used in the futures market. Choosing the right trading platform can also be crucial to success, as it can provide investors with the tools, resources, and support needed to make informed trading decisions and stay ahead of the market.
“We are excited to present CC-42344’s promising safety, tolerability and preclinical data, including robust antiviral activity in an influenza-infected human respiratory epithelium model,” said Dr. Lee. “Our Phase 1 data continue to show this molecule’s potential as an oral therapeutic for the treatment of pandemic and seasonal influenza. Given that CC-42344 has shown sub-nanomolar potency and a novel mechanism of action with high barrier to resistance, we believe it could be used as monotherapy or in combination with other influenza antivirals. We look forward to initiating a Phase 2a influenza A human challenge study in the second half of 2023.”
The slide deck accompanying Dr. Lee’s discussion “First-in-Human Study of CC-42344, a Novel Broad-Spectrum Influenza A Polymerase PB2 Inhibitor” has been posted to the Presentations section of the company website.
About CC-42344 CC-42344 is a novel PB2 inhibitor discovered using Cocrystal’s proprietary structure-based drug discovery platform technology. CC-42344 targets the influenza polymerase complex, an essential enzyme required for the viral replication. In vitro testing showed CC-42344’s potent antiviral activity against influenza A strains, including pandemic and seasonal strains, as well as against strains resistant to osteltamivir (Tamiflu®) and baloxavir marboxil (Xofluza®).
About ISIRV The International Society for Influenza and other Respiratory Virus Diseases (ISIRV) is an independent and international scientific professional society promoting the prevention, detection, treatment and control of influenza and other respiratory virus diseases. ISIRV was founded in 2005 as the first scientific society with a fully worldwide remit focused on influenza and respiratory virus disease. As a global scientific society, ISIRV fulfils this mission through promoting the exchange and dissemination of information, facilitating the interaction of scientists and of public health specialists and the promotion of international collaborative efforts against these diseases. More information is available here.
About Cocrystal Pharma, Inc. Cocrystal Pharma, Inc. is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses (including SARS-CoV-2), hepatitis C viruses and noroviruses. Cocrystal employs unique structure-based technologies and Nobel Prize-winning expertise to create first- and best-in-class antiviral drugs. For further information about Cocrystal, please visit www.cocrystalpharma.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s influenza A product candidate CC-42344’s potential as an oral therapeutic for the treatment of pandemic and seasonal influenza, including either as monotherapy or in combination with other influenza antivirals, and the anticipated initiation of a Phase 2a influenza A human challenge study in the second half of 2023. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events. Some or all of the events anticipated by these forward-looking statements may not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to, the risks and uncertainties arising from inflation, interest rate increases, the current banking crisis and the Ukraine war on our Company, our collaboration partners, and on the U.S. and U.K. and global economies, including manufacturing and research delays arising from raw materials and labor shortages, supply chain disruptions and other business interruptions including any adverse impacts on our ability to obtain raw materials and test animals as well as similar problems with our vendors and our current Contract Research Organization (CRO) and any future CROs and Contract Manufacturing Organizations, the results of the studies for CC-42344, the ability of our CROs to recruit volunteers for, and to proceed with, clinical studies, our and our collaboration partners’ technology and software performing as expected, financial difficulties experienced by certain partners, the results of future preclinical and clinical trials, general risks arising from clinical trials, receipt of regulatory approvals, regulatory changes, development of effective treatments and/or vaccines by competitors, including as part of the programs financed by the U.S. government. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Cumulus Media (NASDAQ: CMLS) is an audio-first media company delivering premium content to over a quarter billion people every month — wherever and whenever they want it. Cumulus Media engages listeners with high-quality local programming through 406 owned-and-operated radio stations across 86 markets; delivers nationally-syndicated sports, news, talk, and entertainment programming from iconic brands including the NFL, the NCAA, the Masters, CNN, the AP, the Academy of Country Music Awards, and many other world-class partners across more than 9,500 affiliated stations through Westwood One, the largest audio network in America; and inspires listeners through the Cumulus Podcast Network, its rapidly growing network of original podcasts that are smart, entertaining and thought-provoking. Cumulus Media provides advertisers with personal connections, local impact and national reach through broadcast and on-demand digital, mobile, social, and voice-activated platforms, as well as integrated digital marketing services, powerful influencers, full-service audio solutions, industry-leading research and insights, and live event experiences. Cumulus Media is the only audio media company to provide marketers with local and national advertising performance guarantees. For more information visit www.cumulusmedia.com.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Patrick McCann, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Meets Q1 expectations. The company reported Q1 revenue of $205.7 million, in line with our previously lowered estimate of $206.4 million. National advertising revenues remained weak in the quarter, largely attributed to persistent macro economic headwinds. Adj. EBITDA of $10.3 million beat our estimate, which we believe was the lowest on the Street, a result of the company’s cost cutting initiatives and healthy growth of digital revenues.
Weak Q2 pacings. Q2 revenues are expected to be impacted by weakening Local advertising, down 4% in Q1 and pacing down 7% in Q2, in addition to double digit declines in National. A bright spot is digital marketing services (DMS), pacing up double digits in Q2. Total company revenue pacings are down low double digits for Q2.
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This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Developing a Deeper Understanding of Hedge Fund Investments
Hedge funds have become a buzzword in the world of investing, it’s one of those investment instruments that people think they can explain until they’re asked to – not everyone understands what they are or how they work. In simple terms, a hedge fund is a private investment vehicle that is managed by a professional investment manager or team. The primary goal of the fund is to generate above market returns for its investors by using various investment strategies that are often more complex and riskier than traditional investment vehicles like managed mutual funds or index funds. The following should help fill many of the gaps in investors understanding of these funds, including their legal structure, investment strategies, and how they differ from other types of investment vehicles.
Structure of a Hedge Fund
Hedge funds are formed as limited partnerships. This makes investors in the fund limited partners. The investment manager is the general partner of the fund and is responsible for making investment decisions on behalf of the limited partners. The general partner is also responsible for raising capital for the fund, safekeeping, and negotiating fees with investors.
Hedge funds are typically only available to accredited investors, which requires that they meet SEC wealth, income, or financial sophistication thresholds. This is because hedge funds are considered to be high-risk investments and are not subject to the same regulations as other types of investment vehicles. Accredited investors are assumed to have the financial sophistication and resources to handle the risks associated with hedge fund investments.
Investment Strategies
Hedge funds use a wide variety of investment strategies to generate returns for their investors. These strategies can range from relatively simple, such as long/short equity, to highly complex, such as quantitative trading or event-driven investing. Some of the most common investment strategies used by hedge funds include:
Long/Short Equity – This strategy involves buying stocks that are expected to increase in value (long) and shorting stocks that are expected to decrease in value (short).
Event-Driven – This strategy involves investing in stocks that are likely to be impacted by specific events, such as mergers, acquisitions, or bankruptcies.
Quantitative Trading – This strategy involves using mathematical models to identify trading opportunities based on patterns in historical data.
Distressed Investing – This strategy involves investing in companies that are in financial distress or undergoing restructuring.
Global Macro – This strategy involves investing in currencies, commodities, and other assets based on macroeconomic trends.
Valuing a Stock
One of the key skills required to be a successful hedge fund manager is the ability to value a stock or other opportunity. This involves analyzing a company’s financial statements, industry trends, and other relevant factors to determine the intrinsic value of the company’s worth. If the stock is undervalued, the hedge fund may decide to invest in it in the hopes that its value will increase over time. Conversely, if the stock is overvalued, the hedge fund may decide to create a short position in it in the hopes that its value will decrease.
Compared to Other Investment Vehicles
Hedge funds differ from other types of investment vehicles in several ways. First, hedge funds are not subject to the same regulations as other types of investment vehicles, which means that they have more flexibility to use complex investment strategies and take on higher levels of risk. Second, as mentioned above, hedge funds are typically only available to accredited investors, whereas more traditional types of investments like mutual funds or index funds are available to the general public. Finally, hedge funds typically charge higher fees than other types of investment vehicles, which can include both management fees and performance fees.
Take Away
Hedge funds are complex investment vehicles that can use a variety of riskier methods in an attempt to generate high returns for their investors by using a wide variety of investment strategies. These strategies can range from relatively simple to highly complex and are often more risky than other types of investments. Hedge funds are structured as limited partnerships and are typically only available to accredited investors. They differ from other types of investment vehicles in their lack of regulatory oversight, and known to charge higher fees.
A Focus on Profitability Drives A Strong Start to the Year
Last quarter we wrote that the S&P 500 increased for the first time since the fourth quarter of 2021 and that we were beginning to see signs of life in Noble’s Internet and Digital Media Indices as well. Those signs of life continued to bear fruit throughout the first quarter, as every one of Noble’s Internet and Digital Media Indices not only finished the quarter up, but significantly outperformed the S&P 500. The best performing index was Noble’s Social Media Index, which increased by 70% in the first quarter of 2023, followed by Noble’s eSports & iGaming Index (+32%), Ad Tech Index (+31%), MarTech Index (+30%), and Digital Media Index (+18%).
Noble’s Indices are market cap weighted, and we attribute the strength of the Social Media Index to its largest constituent, Meta Platforms (META; a.k.a. Facebook) whose shares increased by 76% in the first quarter. We attribute this increase to management’s 4Q 2022 earnings call when they spent most of their time talking about “efficiency”, which investors interpreted to mean that Meta was newly focused on profitability. After a relatively disastrous 3Q 2022 earnings call, after which shares fell by 25%, the company demonstrated on its 4Q 2022 earnings call that it clearly had
gotten the message: investors were not enamored about the company’s plans in October 2022 to spend billions of dollars to develop its Metaverse initiatives. Rather, on its fourth quarter call, management focused on driving its short form video initiative Reels (i.e., becoming more TikTok like), reducing its headcount by reducing layers of management, lowering its operating expenses and reducing its capital expenditures. Investors applauded this newfound focus on profitability and shares rebounded from a low of $88.90 per share in early November to $211.94 at the March quarter-end.
Noble’s eSports and iGaming Index increased by 32% as 9 of the 16 stocks in the index posted gains, the two largest market cap weighted stocks. Shares of the largest stock in the index, Flutter Entertainment (FLTR) increased by 31%) while shares of the second largest stock in the index, DraftKings (DKNG) increased by 70%. Flutter’s improvement is likely due to an improved inflection point in the company’s U.S. operations which include its FanDuel operations. DraftKings also beat revenue and EBITDA expectations in 4Q 2022 and appears to be proving out its path to profitability. In both cases, investors are rewarding companies who are accelerating their path to profitability.
The next best performing index was Noble’s Ad Tech Index which increased by 31% during 1Q 2023. Fourteen of the 23 stocks in the index were up in the first quarter. Standouts during the quarter were Integral Ad Science (IAS; +62%) and Perion Networks (PERI; +56%). Integral Ad Science exceeded expectations in its fourth quarter results and guided to better-than-expected results in 1Q 2023. The company continues to expand its product suite, scale its social media offerings (i.e., for TikTok) and is well positioned to continue to benefit from the shift from linear TV to connected TV (CTV). Perion shares continued their winning streak: Perion was the only ad tech stock whose shares were up in 2022. Perion’s 56% increase in 1Q 2023 reflected beat on both revenues (by 2%) and EBITDA (by 10%) as well as improved guidance for 1Q 2023. Perion’s profitability increased significantly in 2022, with EBITDA nearly doubling (+90%) from $70 million in 2021 to $132 million in 2022.
Noble’s MarTech Index increased by 30% with 14 of the 22 stocks in the index posting increases in 1Q 2023. The best performing stocks were Qualtrics (XM; +70%) Sprinklr (CXM; +59%), Salesforce (CRM; +51%), Hubspot (HUBS; +48%) and Yext (YEXT; +47%). Qualtrics agreed to be acquired for $12.5 billion by Silver Lake and the Canadian Pension Plan Investment Board, which came at a 73% premium to its 30-day volume weighted stock price. Sprinklr beat revenue expectations and significantly beat EBITDA expectations (doubling the Street expectations) and guided to a current year forecast that focuses more on efficiency and profitability. MarTech stocks have been victims of their own success. Two years ago at this time the sector was trading at 11.3x forward revenue estimates, and a year ago the group was trading at 6.5x forward revenues. Today the group trades at 4.1x forward revenues and investors appear to be wading back into the sector.
Finally, Noble’s Digital Media Index, while lagging that of its digital peers posted an 18% increase and significantly outperformed the S&P 500 (+7%) with a broad based recovery in which 9 of the sector’s 11 stocks increase during 1Q 2023. The best performing stock was Spotify (SPOT; +69%), whose revenues fell short of expectations by less than 1%, significantly beat consensus Street EBITDA expectations by $58M and more importantly pivoted towards demonstrating operating leverage. Spotify, which posted an EBITDA loss of nearly $500 million 2022 is expected to generate $650 million in EBITDA in 2024, according Street estimates. A deteriorating ad market 2022 combined with higher interest rates likely prompted the company to shift its priorities to running a profitable company and doing it more quickly. The second best performing stock was Travelzoo (TZOO; +36%), as the company’s 4Q 2022 revenues and EBITDA increased by 31% and 328%, respectively. Notably, Travelzoo’s EBITDA came in 58% higher than Street consensus. The company appears to be benefiting from pent up demand for travel and management highlighted the opportunity for margin expansion in the coming quarters.
Sluggish M&A Market Carries Over into 2023
Last quarter we remarked that M&A deals in the Internet and Digital Media sector had held up well through the first three quarters of 2022 despite economic headwinds. However, the number of deals slowed in 4Q 2022 (by 17%) and total deal value fell dramatically (by 70%). The slowdown carried over into 1Q 2023. According to Dealogic, Global M&A fell by 48% to $575 billion in 1Q 2023 compared to $1.1 trillion in 1Q 2022. Global M&A dollar values fell to their lowest level in a decade. In the U.S., deal values fell by 44% to $283 billion from $176 billion in 1Q 2022.
The M&A market had weathered stock price declines, Fed rate hikes, elevated inflation, and geopolitical conflict in 2022. In 1Q 2023, to this “recession that never comes” economic environment we added increased volatility and uncertainty caused by banking failures. One of the biggest impediments to deals is debt financing. Private equity firms have had to write larger check in lieu of a robust debt financing market. Banks have been less willing to provide financing because some have had to hold loans on their balance sheet or take losses when selling debt to investors while smaller regional banks have seen deposits flee to larger banks, especially those considered too big to fail.
Finally, increased antitrust scrutiny likely has played a role in the M&A deal slowdown. Lengthy merger reviews resulted in three public transactions being blocked by regulators: Standard General’s acquisition of Tegna; JetBlue’s acquisition of Spirit Airlines, and Intercontinental Exchange’s acquisition of Black Knight, Inc.
1Q 2023 Internet and Digital Media M&A: A Dearth of Large Deals
Based on Noble’s analysis, deal making in the first quarter of 2023 in the Internet and Digital Media sectors actually increased by 11% compared to 1Q 2022. The total number of deals we tracked in the Internet and Digital Media space increased to 202 deals in 1Q 2023 compared to 182 deals in 1Q 2022. On a sequential basis, the total number of deals increased by 39% compared to 145 deals in 4Q 2022. The only explanation we can provide for this is that with the expectation that an economic slowdown was pending, many companies likely made the decision to sell in mid-2022, with the deals being announced in 1Q 2023.
The biggest change was in the first quarter’s M&A deal value, where the total dollar value of deals fell by 95% to $5.4 billion of announced deals in 1Q 2023 compared to $108.5 billion in announced deals in 1Q 2022. On a sequential basis, deal value fell by 40% from $9.1 billion in deal value in 4Q 2022.
From a deal volume perspective, the most active sectors we tracked were Digital Content (59 deals), Agency & Analytics (51 deals), and MarTech (39), followed by Information Services (17 deals), Ad Tech (11 deals) and eCommerce sectors (10 deals). From a dollar value perspective, MarTech led the way with $1.6 billion in transactions, followed by Information Services ($1.4 billion), Digital Content ($922 million) and Agency and Analytics ($875 million). The largest deals in the quarter by dollar value are shown below.
Notably, there were no mega deals ($10B+) in the first quarter of 2023, compared to the first quarter of 2022 when Microsoft agreed to by Activision Blizzard for $68 billion and Take-Two Interactive agreed to acquire Zynga for $12 billion. Once the Fed stops hiking rates and visibility into operating trends returns, we may begin to see an environment in which mega deals will be contemplated again.
TRADITIONAL MEDIA COMMENTARY
The following is an excerpt from a recent note by Noble’s Media Equity Research Analyst Michael Kupinski
The NAB Show Stopper
Media investors are unpacking all of information from last week’s National Association of Broadcasters (NAB) convention. There is a lot to digest given that there were over 1,400 exhibits, and 140 new exhibitors this year. Because of the overwhelming number of exhibitors, many that go to Vegas for this annual convention do not go to the convention floor. It is a shame. There is a lot to see and learn. Noble’s Media & Entertainment Analyst Michael Kupinski walked the convention floor, which covers 4.6 million square feet of exhibit halls and meeting rooms. He stopped by booths and taped presentations to explain the new technologies, the plan for implementation of new services, and the prospect for revenue monetization. One important demonstration focused on the new broadcast standard, ATSC 3.0, the hope for a bright future for the television industry. This new standard should allow the industry to become more contemporary in terms of how its audience consumes video and information. In addition, it offers the ability for the industry to participate in new revenue streams, including datacasting, which may become bigger than Retransmission revenue in the future.
In addition to touring the floor, he participated in NAB panel discussions and hosted meetings with media management teams in a fireside chat format to discuss current business trends, the new technologies (including Artificial Intelligence (AI)) and the new broadcast standard. In addition, these C-suite management teams provided their key takeaways from the NAB convention and offered why they participated in the conference this year. These discussions will be available for free to Channelchek users on Channelchek.com on April 27th as a virtual conference. In this upcoming Channelchek Takeaway Series on the NAB Show, Michael offers his key takeaways, including the current advertising outlook, his take on the monetization of the new technologies and what media investors should do now given the current economic and advertising environment. Free registration to this informative event is available here.
This report highlights the performance of the media sectors over the past 12 months and past quarter. Overall, media stocks struggled in the past year, but there has been some improved quarterly performance, particularly in Digital Media and Broadcast Television, discussed later. All media stocks are struggling to offset losses over the course of the past year with trailing 12 months stocks down in the range of 5% on the low end to as high as down 68%.
In the first quarter, stock performance was mixed. The best performers in the traditional media sectors were Broadcast Television stocks, up nearly 10% versus the general market which increased 7% in the comparable period. However, the individual TV stock performance reflected a different story, explained later in this report. The worse performer for the quarter were the radio stocks, driven by a Wall Street downgrade of one of the leading radio broadcasters. We believe that stock performance will be a roller coaster for at least another quarter or two as the weight of the Fed rate increases begin to adversely affect the economy.
While national advertising has remained weak, we believe that local advertising is now beginning to moderate as well. The local advertising weakness appears to be in the smaller markets as well as the larger markets. This is somewhat different than the most recent economic cycles whereby the smaller markets were somewhat resilient. It seems that the smaller markets are feeling the adverse affects from inflation, rising employment costs and tightening bank credit. In our view, the disappointing advertising outlook likely will cause second quarter revenue estimates to come down, creating a difficult environment for media stocks.
Broadcast Television
Weak Current Revenue Trends
TV stocks outperformed the general market in the first quarter. This market cap weighted index masked the performance of many poor performing stocks in the quarter. Sinclair Broadcasting (up 10%), Entravision (up a strong 26%), and Fox (up 12%) were the best performing stocks and favorably influenced the TV index in the quarter. But, there were many poor performing stocks including E.W. Scripps (down 29%), Gray Television (down 22%) and Tegna (down 20%). We believe that there was heightened interest in Entravision given its favorable Q1 results which was fueled by its fast growing digital advertising business. Entravision’s Q4 revenue performance was among the best in the industry. While Entravision was among the best revenue performer, its margins are below that of its peer group EBITDA Margins. This is due to the accounting treatment of its digital revenues given that it is an agency business.. The poorer performing stocks are among the higher debt levered in the industry. The underperformance reflects concern of a slowing economy and investors flight to quality in the sector.
We do not believe that we are out of the woods with the TV stocks and the market is expected to be volatile. The advertising environment appears to be deteriorating given weakening economic conditions. There are bright spots which include some improvement in the Auto category. Dealerships appear to be stepping up advertising given higher inventory levels. In addition, broadcasters appear optimistic about political advertising, which could begin in the third quarter 2023. There is a planned Republican presidential candidate debate schedule in August. There is some promise that candidates will advertise in advance of that debate and into the fourth quarter given the early primary season. We do not believe that political and auto will be enough to offset the weakness in national and Local advertising. In our view, Q2 and full year 2023 estimates are likely to come down. Furthermore, we believe that broadcasters will be shy about predicting political advertising even into 2024 given the past disappointments in management forecasts in the last political cycle.
Broadcast Radio
All Out of Love
Radio stocks had another tough quarter, down 17% versus a 7% gain for the general market. Notably, there was a wide variance in the individual stock performance, with the largest stocks in the group having the worst performance in the quarter, including Audacy (AUD down 40%), Cumulus Media (CMLS down 41%) and iHeart Media (IHRT down 36%). The first quarter stock performance did not appear to reflect the fourth quarter results, during which revenues were relatively okay, with some exceptions. Some of the larger radio companies which have a large percentage of national advertising, underperformed relative to the more diversified radio companies, especially those with a strong digital segment presence. Margins for the industry remain relatively healthy.
The weakness in the Radio stocks was fueled in the quarter from a downgrade to Underperform on the shares of iHeart by a Wall Street firm. Many radio stocks were down in sympathy. The analyst attributed the downgrade to the current macro environment and its heavy floating rate debt burden. The company is not expected to generate enough free cash flow to de-lever its balance sheet. We believe the downgrade as well as the excessive debt profile of Audacy, another industry leader which likely will need to restructure, sent all radio stocks tumbling. Some stocks performed better than others. While Cumulus Media’s debt profile is not as levered as iHeart or Audacy, the shares were caught in the net of a weak advertising outlook. Cumulus is among the most sensitive to national advertising, which currently continues to be weak.
Some of our favorite stocks which are diversified and have developing digital businesses performed better. Those stocks included Townsquare Media (TSQ, up 10%), and Salem Media (SALM, up 4%). Notably, while the shares of Beasley Broadcasting (BBGI) were down 10%, the shares performed better than the 17% decline for the industry in the quarter. Importantly, Beasley recently provided favorable updated Q1 guidance for the first quarter. Q1 revenues are expected to increase 1% to 2.5% and EBITDA growth is expected to be in the range of 40% to 50%, significantly better than our estimates. Furthermore, management provided a sanguine outlook for 2023 and 2024. Digital revenue is expected to reach 20% to 30% of total revenue with a goal of reaching 40% in 2024. By comparison, digital revenue was 17% of total revenue in the fourth quarter 2022. Furthermore, the company is sitting on roughly $35 million in cash. It has opportunistically repurchased $10 million of its bonds at a significant discount. We believe that it is likely to maintain a strong cash position given the economic uncertainty.
Townsquare Media (TSQ), Salem Media (SALM) and Beasley Broadcast (BBGI) are all diversifying their revenue streams. While these companies are not immune to the economic headwinds, we believe theirdigital businesses should offer some ballast to its more sensitive Radio business. In the case of Salem, 30% of its revenues are relatively stable with block programming.
Publishing
After a period of moderating revenue trends, publishers reported a weakened advertising environment. Revenue trends deteriorated with print advertising taking a nose dive. This trend was illustrative in the results from Lee Enterprises. After a fiscal fourth quarter flat revenue performance, the company reported a 8.5% decline in its fiscal first quarter. The Q1 revenue performance reflected an 18.5% decrease in print advertising, an acceleration in the rate of the 11% decline in the previous quarter.
The surprisingly weak quarter hit the company’s adj. EBITDA margins. Traditionally, Lee maintained some of the best margins in the industry., but the company fell in ranking to among the lowest in the sector. Importantly, in spite of the revenue weakness, the company maintained its previous adj. EBITDA guidance of $94 million to $100 million for F2023. To achieve its cash flow target in light of the soft revenue outlook, Lee implemented a round of expense cuts to bolster cash flow. Cost reductions are expected to result in $40 million of savings in FY 23, and $60 million in annualized savings going forward. While the company’s print business declined more than expected , the company’s digital businesses remains favorably robust. In addition, its digital business is turning toward contributing margins; another step in the company’s digital evolution.
This newsletter was prepared and provided by Noble Capital Markets, Inc. For any questions and/or requests regarding this news letter, please contact Chris Ensley
DISCLAIMER
All statements or opinions contained herein that include the words “ we”,“ or “ are solely the responsibility of NOBLE Capital Markets, Inc and do not necessarily reflect statements or opinions expressed by any person or party affiliated with companies mentioned in this report Any opinions expressed herein are subject to change without notice All information provided herein is based on public and non public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on their own appraisal of the implications and risks of such decision This publication is intended for information purposes only and shall not constitute an offer to buy/ sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice Past performance is not indicative of future results.
Please refer to the above PDF for a complete list of disclaimers pertaining to this newsletter
Classic Burger Chain Broadens International Presence with Newest BengaluruLocation
LOS ANGELES, April 18, 2023 (GLOBE NEWSWIRE) — FAT (Fresh. Authentic. Tasty.) Brands Inc., parent company of Johnny Rockets and 16 other restaurant concepts, announces a new location in India at the Kempegowda International Airport in partnership with HMSHost. Located in Bengaluru, the capital city of Karnataka, the new Johnny Rockets serves the classic fare that put the brand on the map over 35 years ago, including juicy, made-to-order burgers and hand-spun shakes.
“Expanding Johnny Rockets’ presence in non-traditional venues continues to be a key growth objective for the brand,” said Jake Berchtold, COO of FAT Brands’ Fast Casual Division. “Strategically, we are pleased to spearhead this type of expansion in a country like India, where we see significant opportunity to build our footprint.”
“We are seeing exciting times in the air travel industry as the demand remains strong in both the domestic and international travel spaces,” said Jagvir Singh Rana, Managing Director, India and Middle East, HMSHost. “With increased travel and the opening of T2 at Bengaluru International Airport, guest expectations are sure to increase. By partnering with Johnny Rockets, we aim to not only give our guests varied food choices but also an experience they will cherish forever.”
The first Johnny Rockets restaurant opened June 6, 1986, on Melrose Avenue in Los Angeles. Since that time, the chain’s timeless all-American brand has connected with customers across the U.S. and in 25 other countries around the globe.
The Johnny Rockets team’s passion for delivering fresh, classic American fare is only equaled by their commitment to providing a superb guest experience. The new location’s menu includes cooked-to-order burgers, indulgent, hand-spun real ice cream shakes, crispy fries, halal chicken options and more.
The new Bengaluru Johnny Rockets is located at Kempegowda International Airport, Terminal 2, Devanhalli, Bengaluru, and is open from 2 a.m. to 12 a.m. daily.
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets and develops fast casual, quick-service, casual and polished casual dining restaurant concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.
About Johnny Rockets Founded in 1986 on Melrose Avenue in Los Angeles, Johnny Rockets is a world-renowned international franchise that offers high-quality, innovative menu items including Certified Angus Beef® cooked-to-order hamburgers, veggie burgers, chicken sandwiches, crispy fries, and rich, delicious hand-spun shakes and malts. With over 325 locations in over 25 countries around the globe, this dynamic lifestyle brand offers friendly service and upbeat music contributing to the chain’s signature atmosphere of relaxed, casual fun.
Research Directed by Faculty of the Center for Transplantation Sciences, Massachusetts General Hospital
CHATHAM, N.J., April 17, 2023 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP), a clinical-stage biopharmaceutical company, today announced the on-line publication of two papers1,2 in the American Journal of Transplantation by faculty at the Center for Transplantation Sciences, Massachusetts General Hospital (MGH) in collaboration with Tonix Pharmaceuticals. The data involve studies of Tonix’s TNX-1500 (Fc-modified anti-CD40L humanized monoclonal antibody [mAb]) product candidate in development for the prevention of organ transplant rejection. The molecular target of TNX-1500 is CD40-ligand (CD40L), which is also known as CD154, T-BAM or 5c8 antigen. The publications include data demonstrating that TNX-1500 showed activity in preventing organ rejection and was well tolerated in non-human primates. Blockade of CD40L with TNX-1500 monotherapy consistently and safely prevented pathologic alloimmunity in non-human primate models of cardiac and kidney allograft model without clinical thrombosis.
“There remains a significant need for new treatments with improved activity and tolerability to prevent organ transplant rejection,” said Seth Lederman, M.D., Chief Executive Officer of Tonix Pharmaceuticals. “To date, there has not been a humanized anti-CD40L antibody that can effectively prevent transplant rejections with an acceptable level of tolerability. TNX-1500 is a third generation anti-CD40L mAb that has been designed by protein engineering to decrease FcγRII binding and to reduce the potential for thrombosis. The animal studies found that TNX-1500 retains activity to prevent rejection and preserve graft function. Tonix expects to start a first-in-human Phase 1 study in the second quarter of 2023 of TNX-1500 for prophylaxis of organ rejection in adult patients receiving a kidney transplant.”
Tatsuo Kawai, M.D., Ph.D., A. Benedict Cosimi Chair in Transplant Surgery, MGH and Professor of Surgery, Harvard Medical School (HMS) and senior author of the kidney transplant publication, said, “The blockade of the CD40L-CD40 pathway with anti-CD40L mAbs has been the most promising immunomodulatory approach to prevent allograft rejection. However, long-term graft and patient survival following transplantation of kidneys and other solid organs are constrained by side effects of the existing medications. Our data demonstrate a favorable safety profile associated with TNX-1500, since neither non-human primate nor human platelet activation were observed in-vitro when exposed to TNX-1500-sCD40L immune complexes. The therapeutic effects of TNX-1500 to consistently inhibit rejection of mismatched kidney allografts were not associated with infectious or thromboembolic complications, suggesting that clinical studies are warranted to evaluate TNX-1500 for transplant indications.”
Richard N. Pierson III, M.D., scientific director of the Center for Transplantation Sciences in the Department of Surgery at MGH and Professor of Surgery at HMS and senior author of the heart transplant paper said, “Anti-CD40L therapy has a unique activity in controlling the immune response to organ transplants. There remains a significant need for new treatments with improved activity and tolerability to prevent or treat organ transplant rejection. Anti-CD40L has shown great promise to facilitate transplant tolerance in multiple preclinical transplant models. A safe, effective anti-CD40L also has potential to enable use of genetically modified or humanized pig organs to treat humans with advanced organ failure or diabetes, an emerging field known as xenotransplantation.”
Tonix Pharmaceuticals Holding Corp.*
Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of central nervous system (CNS), rare disease, immunology and infectious disease product candidates. Tonix’s CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL (cyclobenzaprine HCl sublingual tablet), is in mid-Phase 3 development for the management of fibromyalgia with topline data expected in the fourth quarter of 2023. TNX-102 SL is also being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Enrollment in a Phase 2 study has been completed, and topline results are expected in the third quarter of 2023. TNX-1900 (intranasal potentiated oxytocin), a small molecule in development for chronic migraine, is currently enrolling with topline data expected in the fourth quarter of 2023. TNX-601 ER (tianeptine hemioxalate extended-release tablets), a once-daily formulation of tianeptine being developed as a treatment for major depressive disorder (MDD), is also currently enrolling with interim data expected in the fourth quarter of 2023. TNX-1300 (cocaine esterase) is a biologic designed to treat cocaine intoxication and has been granted Breakthrough Therapy designation by the FDA. A Phase 2 study of TNX-1300 is expected to be initiated in the second quarter of 2023. Tonix’s rare disease portfolio includes TNX-2900 (intranasal potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan Drug designation by the FDA. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft and xenograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the second quarter of 2023. Tonix’s infectious disease pipeline includes TNX-801, a vaccine in development to prevent smallpox and mpox, for which a Phase 1 study is expected to be initiated in the second half of 2023. TNX-801 also serves as the live virus vaccine platform or recombinant pox vaccine platform for other infectious diseases. The infectious disease portfolio also includes TNX-3900, a class of broad-spectrum small molecule oral antivirals.
*All of Tonix’s product candidates are investigational new drugs or biologics and none has been approved for any indication.
1Lassiter, G., et al. (2023). TNX-1500, a crystallizable fragment–modified anti-CD154 antibody, prolongs nonhuman primate renal allograft survival. American Journal of Transplantation. April 3, 2023. https://doi.org/10.1016/j.ajt.2023.03.022
2Miura, S., et al. (2023) TNX-1500, a crystallizable fragment–modified anti-CD154 antibody, prolongs nonhuman primate cardiac allograft survival. American Journal of Transplantation. April 6, 2023. https://doi.org/10.1016/j.ajt.2023.03.025
Forward Looking Statements
Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; delays and uncertainties caused by the global COVID-19 pandemic; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2023, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.
COMPANY TO SHARE PRELIMINARY SAFETY AND EFFICACY DATA FROM ONGOING PHASE 1/2 TRIAL OF OCU400 FOR THE TREATMENT OF RETINITIS PIGMENTOSA AND LEBER CONGENITAL AMAUROSIS
MALVERN, Pa., April 11, 2023 (GLOBE NEWSWIRE) — Ocugen, Inc. (Ocugen or the Company) (NASDAQ: OCGN), a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies, biologics, and vaccines, today announced that it will host an Investor and Analyst Event on April 14, 2023, at 8 a.m. ET. During the webcast and conference call, members of the Ocugen leadership team and key opinion leaders will review preliminary safety and efficacy results from the Phase 1/2 trial of OCU400 for the treatment of retinitis pigmentosa (RP) and Leber congenital amaurosis (LCA).
The event will feature:
Shankar Musunuri, PhD, MBA, Chairman, CEO and Co-founder, Ocugen
Arun Upadhyay, PhD, Chief Scientific Officer, Head of Research, Development & Medical, Ocugen
Huma Qamar, MD, MPH, Head of Clinical Development and Medical Affairs, Ocugen
David Birch, PhD, Scientific Director, Retina Foundation of the Southwest, primary investigator of the study
Neena B. Haider, PhD, Fellow of ARVO and inventor of modifier gene therapy
Webcast and Conference Call Details
Dial-in Numbers: (800) 715-9871 for U.S. callers and (646) 307-1963 for international callers Conference ID: 4898155 Webcast: Available on the events section of the Ocugen investor site
A replay of the call and archived webcast will be available for approximately 45 days following the event on the Ocugen investor site.
About Ocugen, Inc. Ocugen, Inc. is a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe. We are making an impact on patient’s lives through courageous innovation—forging new scientific paths that harness our unique intellectual and human capital. Our breakthrough modifier gene therapy platform has the potential to treat multiple retinal diseases with a single product, and we are advancing research in infectious diseases to support public health and orthopedic diseases to address unmet medical needs. Discover more at www.ocugen.com and follow us on Twitter and LinkedIn.
Cautionary Note on Forward-Looking Statements This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. We may, in some cases, use terms such as “predicts,” “believes,” “potential,” “proposed,” “continue,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements are subject to numerous important factors, risks, and uncertainties that may cause actual events or results to differ materially from our current expectations. These and other risks and uncertainties are more fully described in our periodic filings with the Securities and Exchange Commission (SEC), including the risk factors described in the section entitled “Risk Factors” in the quarterly and annual reports that we file with the SEC. Any forward-looking statements that we make in this press release speak only as of the date of this press release. Except as required by law, we assume no obligation to update forward-looking statements contained in this press release whether as a result of new information, future events, or otherwise, after the date of this press release.
Contact: Tiffany Hamilton Head of Communications IR@ocugen.com
Prioritizing Clinical-Stage CNS Programs in Fibromyalgia, Depression, Migraine, and Cocaine Intoxication
Deprioritizing COVID-19 Related Programs and Pending Posttraumatic Stress Disorder (PTSD) Trial
Cash and Cash Equivalents Totaled Approximately $120.2 Million at December 31, 2022
CHATHAM, N.J., April 04, 2023 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP), a clinical-stage biopharmaceutical company, today announced it is reallocating resources and cash to streamline its pipeline and focus on its mid- and late-stage clinical programs within its core central nervous system (CNS) portfolio. The pipeline realignment prioritizes key near-term value drivers, reduces investment in several longer-term programs, particularly COVID-19-related studies, and delays the start of a posttraumatic stress disorder (PTSD) study in Kenya.
“We are excited to focus our efforts on the confirmatory, registration-enabling Phase 3 trial in fibromyalgia and the potentially pivotal Phase 2 trials for chronic migraine and depression,” said Seth Lederman, M.D., Chief Executive Officer of Tonix Pharmaceuticals. “To increase our operational efficiency, we intend to focus resources on our CNS portfolio – which also includes an upcoming Phase 2 study in cocaine intoxication – and to deprioritize several other programs with longer timelines, particularly programs related to COVID-19. With our experienced development team, Tonix is confident in its abilities to advance its diverse portfolio with multiple opportunities for achieving value creating milestones in 2023 and beyond.”
Key Anticipated 2023 Milestones
Interim analysis results of Phase 3 RESILIENT study of TNX-102 SL (sublingual cyclobenzaprine tablets) for fibromyalgia in the second quarter of 2023.
Interim analysis results of Phase 2 PREVENTION study of TNX-1900 (intranasal potentiated oxytocin) for chronic migraine in the fourth quarter of 2023.
Interim analysis results of Phase 2 UPLIFT study of TNX-601 ER (tianeptine hemioxalate extended-release tablets) for major depressive disorder in the fourth quarter of 2023.
Topline results of Phase 3 RESILIENT study of TNX-102 SL for fibromyalgia in the fourth quarter of 2023.
Initiate enrollment in a potentially pivotal Phase 2 study of TNX-1300 (recombinant double-mutant cocaine esterase for injection) for the emergency room reversal of the effects of cocaine intoxication.
Tonix is aligning its operational and scientific efforts on its core CNS programs and deprioritizing other programs as follows:
Central Nervous System (CNS): The Company is prioritizing the advancement of its late- and mid-stage clinical fibromyalgia, depression, migraine, and cocaine intoxication studies and delaying the start of the Kenya PTSD study. The Company has received regulatory clearance in Kenya, which will allow it to rapidly restart the PTSD program at the appropriate time. The Company is discontinuing the enrollment of new patients in a Phase 2 clinical trial in fibromyalgia-type Long COVID. The approximately 60 patients enrolled to date in the Long COVID study will be followed to completion, with topline data expected in the third quarter of 2023. The Company believes that the data from the study may guide future development and support grant applications.
Infectious Disease: The Company is continuing to advance development of TNX-801 (live virus vaccine to protect against smallpox and mpox) and its portfolio of potential broad-spectrum antiviral agents, including direct antiviral engineered proteins, TNX-4000, and the host-directed antiviral series of molecules, TNX-3900. The Company will also continue work on the recombinant pox virus (RPV) platform vector technology as a platform for rapid response to new pathogens, rather than specifically on the TNX-1800/TNX-1850 vaccines for COVID-19. Near-term preclinical work on other COVID-19 related programs, including anti-COVID antibodies TNX-3600, TNX-3800 and TNX-4100, will be deprioritized.
Immunology and Rare Disease: The Company is continuing development on TNX-1500 (a third generation anti-CD40L monoclonal antibody for prophylaxis of organ transplant rejection and treatment of autoimmune disorders), and TNX-2900 (intranasal potentiated oxytocin), a small peptide for the treatment of hyperphagia in Prader-Willi syndrome (PWS). The FDA has granted Orphan Drug designation for TNX-2900 for PWS.
Tonix Pharmaceuticals Holding Corp.*
Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of central nervous system (CNS), rare disease, immunology and infectious disease product candidates. Tonix’s CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL (cyclobenzaprine HCl sublingual tablet), is in mid-Phase 3 development for the management of fibromyalgia with interim data expected in the second quarter of 2023. TNX-102 SL is also being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Enrollment of approximately 60 patients in a Phase 2 study has been completed, and topline results are expected in the third quarter of 2023. TNX-1900 (intranasal potentiated oxytocin), in development for chronic migraine, is currently enrolling with interim data expected in the fourth quarter of 2023. TNX-601 ER (tianeptine hemioxalate extended-release tablets), a once-daily formulation being developed as a treatment for major depressive disorder (MDD), is also currently enrolling with interim data expected in the fourth quarter of 2023. TNX-1300 (cocaine esterase) is a biologic designed to treat cocaine intoxication and has been granted Breakthrough Therapy designation by the FDA. A Phase 2 study of TNX-1300 is expected to be initiated in the second quarter of 2023. Tonix’s rare disease portfolio includes TNX-2900 (intranasal potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan Drug designation by the FDA. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft and xenograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the second quarter of 2023. Tonix’s infectious disease pipeline includes TNX-801, a vaccine in development to prevent smallpox and mpox, for which a Phase 1 study is expected to be initiated in the second half of 2023. TNX-801 also serves as the live virus vaccine platform or recombinant pox vaccine platform for other infectious diseases. The infectious disease portfolio also includes TNX-3900 and TNX-4000, classes of broad-spectrum small molecule oral antivirals.
*All of Tonix’s product candidates are investigational new drugs (IND) or biologics and have not been approved for any indication. TNX-801, TNX-1500, TNX-2900, TNX-3900 and TNX-4000 are in pre-IND stageof development and have not been approved for any indication.
Forward Looking Statements
Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; delays and uncertainties caused by the global COVID-19 pandemic; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2023, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.
CFA Exam is Evolving to Better Reflect Employee, Employer, and Candidate Needs
The CFA Institute is making the most significant changes to its program since first introduced back in 1963. All of the changes are designed to better serve employers, candidates, and charterholders. The designation is considered the gold standard in the investment profession, so modifying the program must have involved much thought and debate. Six additions will be rolled out for those beginning the journey toward a CFA this year. The end result will be expanded eligibility, hands-on learning, a more focused curriculum, additional practice available, the ability to specialize, and recognition at every passed level.
What is a Chartered Financial Analyst?
A Chartered Financial Analyst (CFA) is a professional designation awarded to financial analysts who have passed a rigorous set of exams administered by the CFA Institute. The CFA program is a globally recognized, graduate-level curriculum that covers a range of investment topics, including financial analysis, portfolio management, and ethical and professional standards.
To become a CFA charterholder, candidates must pass three levels of exams, each of which are administered once a year. In addition to passing the exams, candidates must also meet work experience or school requirements.
Eligibility
The institute is selective in who can be a candidate. In the past, those with a degree and working in the business, needed to be sponsored by two people; first, a current CFA member, and the second the prospective candidate’s supervisor. For students, the requirement was that they be in their last year of study and be sponsored by a professor in lieu of a supervisor.
The policy that had been in place is that students with just one year remaining in their studies may seek CFA candidacy. The purpose of the new policy, according to Margeret Franklin CFA, President and CEO of the CFA Institute, is to “provide students with the opportunity to Level 1 of the CFA program as a clear signal to employers that they are serious about a career in the investment industry by getting an early start in the program.” This is the first of the revisions in the program and has been in place since November 2022.
Job Ready Skills
This new feature recognizes there is a difference between textbook understanding and work. The upcoming study and test material is designed for charterholders to be able to add value much earlier to their employer by imparting practical skills. A practical skills module will be added beginning with those scheduled for the February 2024 Level 1 exam. Level II candidates taking the test in May 2024 will also be tested on this new material. Level III candidates will see this material in 2025.
The impetus for this addition, according to the CFA Institute’s website, is it, “allows us to meet the expressed needs of student candidates, providing them with the opportunity to prepare for internships and investment careers, while also addressing industry demand for well-trained, ethical professionals.”
Expanded Study Material
Candidates are told they can greatly increase their chances of success taking the exam if they correctly answer 1,000 practice question during study, and score at least 70% on a mock exam. The Institute has added as an extra (not part of the basic study package) three new elements for preparation.
To increase the percentage of successful candidates, the CFA Institute now offers a Level I Practice Pack. It includes 1,000 more practice questions and six additional mock exams to go with the study materials that is standard with registration.
The add-on also provides six additional, exam-quality mock exams. The questions are prepared by the same team that create the exams each year.
More Focused
The CFA has branded itself with the promise that 300 hours of study per level is what is needed for success. They recognize that most candidates put in much more time, and the success rate for this tough series of exams is low. The Institute has streamlined study to make more efficient its Level I material beginning with those sitting for the Level I exam in 2024.
To be more efficient, the Institute presumes Level I candidates have already mastered many introductory financial concepts as part of their university studies or career role. To avoid duplication and to streamline Level I curriculum content, they have moved some of this content. It is available separately as reference material for registered candidates.
The content that has been moved to “Pre-Read” incudes topics like the time-value of money, basic statistics, microeconomics, and introduction to company accounts.
Choose Your Specialty
Starting in 2025, candidates will be able to choose one of three specialty paths to be tested at Level III. The reason for the addition is the CFA curriculum has always prepared candidates for investment and finance buy-side roles. This choice allows the CFA credential to grow and develop to meet the needs of a broader group of individuals and employers.
The CFA traditional path has been to prepare the candidate for a portfolio management role. This traditional path is still included. The Institute is also adding concentrations in private wealth management, and private markets. There will only be one credential, the Chartered Financial Analyst, but three areas of specialty.
Recognition at Every Level
While the goal of every candidate is to earn a full-fledged CFA designation, each level is a significant achievement. Now, CFA Institute awarded digital badges will recognize success at the first two levels.
The digital badges, to be used on social media when rolled out later in 2023 will be accompanied by marketing and awareness-building with employers, to improve the visibility and value placed on progress through the CFA program. The goal is for candidates to be distinguished in the market, have one-click social sharing, with instant verification to employers and colleagues to boost credibility and solidify a candidates’ accomplishment.
Overall the change, is to signal to the market that completing Levels I and II are substantial achievements, with tangible recognition of a candidate’s commitment to the industry through their learned skills and experience, professionalism and ethical practices.
Take Away
The world investment world is changing, and the CFA Institute is responding in order to better serve those that benefit from this prestigious designation. Candidates will now have more choices, more study material available, and the ability to take credit for their rigorous studies beginning after passing Level I.
Michael Burry’s New Comments Highlight the Importance of Pivoting
With most major indexes in positive territory for the year but still, well below their 2022 starting point, are markets moving to make up their losses? Michael Burry thinks so. In the most positive tweet I have seen from him in almost four years, Burry posted he was “wrong to say sell.” As recently as late January, Burry posted a one-word tweet, “Sell.” The pundits read into it that perhaps another economic crisis similar to the one that occurred in 2008 will crush markets. His almost cult-like following was built by being one of the few individuals who correctly positioned his investments for the housing and subprime mortgage problems that shook the U.S. in late 2008.
Michael Burry Suggests We Have a Bull Market
Market participants are surprised at both Burry’s bullishness and open acknowledgment that he believes he was overly negative and has gotten it wrong this time. The widely followed investor has been bearish and broadcasting this sentiment to his 1.4 million Twitter followers. The suggestions have been that they should consider lightening their holdings. Burry even caught investor attention with his own 13F reported short position in Apple (AAPL).
Burry points to high levels of dip buying, which may have changed today’s market landscape. This is backed up by other reports, including one from Bloomberg that gives a reason that 2023 is shaping up to be one of the best years for dip-buyers.
Importance of Pivoting
He may not have been “wrong.” The best investors understand their time frame and will recognize when market moves are not as expected. On February 2nd, a few days after Burry’s January 31st “sell” tweet, the S&P 500 index closed at 4,180 just after the Fed interest rate target increased by 25 basis points. To date, that is the large-cap index’s highest close of 2023, as weeks of declines followed. The NDX had fallen nearly 3% since that day.
But the trend, if it continues, appears to have changed. The equity market in March has been surprisingly resilient. It has been able to shrug off multi-country concerns surrounding the banks, elevated expectations of an economic downturn, and forecasts that S&P 500 companies will report their biggest quarterly earnings decline since the second quarter of 2020.
Moving from a sell to a more bullish position, for those that are looking to capture short-term moves, seems to be what is implied in his tweet. It may be that Michael Burry was not wrong in direction, as the markets did fall, just wrong in how long they would stay weak.
Take Away
There are long-term trends and short-term trends. Also, trends that are weak and strong through different sectors at the same time. While time will tell if Burry is correct in his most recent direction, the ability to see market sentiment changing and go with it is characteristic of a successful trader.
