We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
Grayscale Bitcoin Investment Trust (GBTC)
Grayscale Bitcoin Investment Trust (GBTC), a trust tracking bitcoin’s market price, was up 20% on Monday after Tesla announced a $1.5 billion balance sheet investment - roughly 8% of its cash - into bitcoin. Tesla also said it would start accepting bitcoin as payment for its products. Tesla’s decision seems to be legitimizing bitcoin as corporate cash.
Longview Acquisition Corporation (LGVW), a special purpose acquisition company (SPAC) that is acquiring Butterfly Network, closed up 18% on Monday. In our view, investors and speculators are building positions prior to the consummation of the merger on or around February 16th. Butterfly is a medical technology company focused on democratizing access to point-of-care ultrasound (POCUS) devices. Unlike other centralized and handheld POCUS instruments, Butterfly's technology uses a proprietary semiconductor-based, AI-assisted ultrasound system instead of a system based on piezoelectric crystals. Butterfly's technology seems to be a more cost-effective, robust, and differentiated tool for medical imaging.
ExOne (XONE), a global leader in additive manufacturing technology, appreciated more than 35% on Monday and 18% on Tuesday, before dropping 16% on Wednesday. ExOne preannounced revenues higher than consensus expectations for the fourth quarter as well as guidance for 2021 revenue growth of 15-25%, well above the 12.5% consensus expectation thanks to new products and increased demand. After the close on Tuesday, ExOne announced a secondary stock offering, pricing it on Wednesday at $54 per share.
Organovo (ONVO), a biotechnology company focused on 3D-bioprinting, traded up 18% on Monday and 23% on Thursday, possibly because investors and speculators may be gaining confidence in its ability to maximize its 3D-bioprinting assets and deliver on a revitalized commercial strategy. We believe shares will be volatile until Organovo reveals more about its path forward.
Pacific Biosciences (PACB), a leader in highly accurate and comprehensive DNA, RNA, and epigenetic sequencing, traded up 16% on Wednesday after disclosing that Softbank had invested $900 million via convertible debt. In our view, Softbank’s investment will allow PacBio to accelerate the cost- and price-decline of its highly accurate long-read technology (HiFi), pursue a more aggressive R&D schedule, and drive commercialization efforts faster than otherwise would be the case. HiFi sequencing should become the standard for whole genome sequencing across clinical, research, and population efforts, thanks to its accuracy, ability to phase mutations to maternal or paternal haplotypes, comprehensive variant detection, and native epigenetic detection. Though more expensive than short-read sequencing, the value of HiFi-sequenced genomes seems to be higher. As PacBio drives down prices and increases system throughput, many applications are likely to migrate to HiFi technology.
Ping An Healthcare and Technology (1833 HK) rallied 21% on Wednesday, perhaps in response to its full year report and a number of Chinese broker ratings upgrades. Ping An Health is the largest online medical consulting firm in China based on total number of users and average daily queries.
Huya (HUYA) appreciated more than 19% on Thursday. The number one live game streaming platform in China, Huya currently is in talks with Douyu, the second-largest player in the space, with hopes to merge before mid-year
Zillow Group (ZG) rose 16% on Thursday after an exceptionally strong fourth quarter report and stronger than expected first quarter guidance. Zillow's internal economist is projecting a 21% increase in US home sales this year thanks in part to a double-digit increase in prices. Zillow Group is the largest real estate marketplace in the US with more than 200 million monthly active users.
CM Life Sciences (CMLF), a special purpose acquisition company (SPAC), surged 15% on Friday after announcing its plan to combine with Sema4, a population-scale health intelligence company. Unlike many legacy molecular diagnostics companies, Sema4 has focused on developing a platform instead of a diagnostic product. In our view, Sema4's genomics acumen, epidemiological expertise, and emphasis on longitudinal patient care should yield a more engaging and effective experience for large health systems. Studying patient transitions from health to illness across large and diverse groups, Sema4 should be able to help physicians intervene before diseases become intractable.
HubSpot (HUBS) appreciated 16% on Friday after reporting better than expected fourth quarter earnings. HubSpot offers a full suite of digital solutions for businesses, including marketing, sales, and customer service tools. In its fourth quarter results, the company noted that it had surpassed two significant milestones: annual recurring revenue of $1 billion and 100,000 customers.