Karuna Rises on Positive Phase 1b Trial Data while Peloton Falls on Thanksgiving “Turkey Burn” Outage
Last week, the Opportunity Equity Strategy's representative account gained 0.66%, underperforming the S&P 500’s 1.02% rise. (Exhibit 1). The strategy ended the week up 21.23% YTD, 71 basis points ahead of the S&P 500.
Exhibit 1: Performance of Opportunity Equity Representative Account Net of Fees, Versus S&P 500, Through 11/24/231
| Time Period | Opportunity Equity Representative Account | S&P 500 |
| Last Week (11/17 - 11/24) | 0.66% | 1.02% |
| MTD | 11.78% | 8.88% |
| QTD | 2.57% | 6.59% |
| YTD | 21.23% | 20.52% |
| 1 Year | 9.07% | 15.11% |
| 5 Year | 3.41% | 13.54% |
| 10 Year | 6.65% | 11.80% |
| Inception (annualized since 6/26/00) | 6.40% | 7.02% |
Source: Bloomberg, Patient Capital Management.
Coinbase Global, Inc. (COIN) rose following Bitcoin prices higher over the course of the week. In reference to Binance CEO Changpeng Zhou’s resignation, guilty plea, and the company’s $4B settlement with the United States Department of Justice (DOJ), Coinbase CEO Brian Armstrong highlighted this should allow the industry “to turn the page on that and hopefully close that chapter of crypto’s history” in an interview with CNBC.
Karuna Therapeutics, Inc. (KRTX) rose above the 100-day moving average after the company announced positive phase 1b data on the effect of its KarXT candidate on 24-hour blood pressure in adults suffering from schizophrenia. KarXT was well tolerated, and the safety trial was consistent with the company’s EMERGENT trials. Management confirmed that the data will be included in its upcoming Day 120 regulatory update and is not expected to delay the approval timeline with the United States Food and Drug Administration (FDA).
Amazon.com, Inc. (AMZN) announced a new commitment called “AI Ready,” designed to provide free AI skills training to 2 million people globally by 2025. Later in the week, Reuters reported that Amazon is set to win unconditional EU antitrust approval for its acquisition of iRobot.
Green Thumb Industries Inc. (GTBIF) rose above the 50-day moving average.
Energy Transfer LP (ET) rose above the 50-day moving average.
Exhibit 2: Significant2 Contributors to Opportunity Equity Representative Account Performance, 11/17/23 - 11/2423
| Name | Type | Net Return |
| Coinbase Global, Inc. | Equity | 16.6% |
| Karuna Therapeutics, Inc. | Equity | 6.1% |
| Green Thumb Industries Inc. | Equity | 5.8% |
| Energy Transfer LP | Equity | 1.5% |
| Amazon.com, Inc. | Equity |
1.1% |
Source: Patient Capital Management. See below for additional information.
Truist lowered its price target on Norwegian Cruise Line Holdings Ltd. (NCLH) to $17 from $20 (18% upside), while Citi raised its price target to $16 from $14 (11% upside).
Peloton Interactive, Inc. (PTON) CEO Barry McCarthy publicly apologized to customers after the company’s Thanksgiving “Turkey Burn” live class was unavailable to some riders for the first 20 minutes. Macquarie lowered its price target to $6 from $7 (14% upside).
PureTech Health PLC (PRTC LN) fell despite its founded entity, Karuna Therapeutics, reporting positive Phase 1b KarXT trial results.
S4 Capital PLC (SFOR LN) named Melanie Dhawan Chief Financial Officer of its Content Practice. During the previous week, Fitch lowered its Long-Term Issuer Default Rating to BB- from BB, with a negative outlook.
OneMain Holdings, Inc. (OMF) announced the acquisition of auto lender Foursight Capital from Jefferies for $115M in cash, which includes a $900M loan portfolio, a loan origination platform, and a franchised dealer network that expands OneMain’s indirect auto lending presence. The transaction is expected to close in Q1 2024.
Exhibit 3: Significant2 Detractors from Opportunity Equity Representative Account Performance, 11/17/23 - 11/24/23
| Name | Type | Net Return |
| Norwegian Cruise Line Holdings Ltd. | Equity | -3.8% |
| Peloton Interactive, Inc. | Equity | -4.5% |
| PureTech Health PLC | Equity | -4.6% |
| S4 Capital PLC | Equity | -5.2% |
| OneMain Holdings, Inc. | Equity | -0.8% |
Source: Patient Capital Management. See below for additional information.
As of prior week's market close unless otherwise stated.
1The performance figures for the representative Opportunity Equity account reflect the deduction investment management fees and certain other expenses. Returns greater than 1 year are annualized.
Patient Capital Management, LLC completed its acquisition of the Opportunity Equity Strategy from Miller Value Partners, LLC on May 26, 2023. Patient Capital Management served as the investment adviser to the Opportunity Equity Strategy for the majority of the week referenced herein. Additionally, prior versions of this weekly blog posting refer to Miller Value Partners as investment adviser to the Opportunity Equity Strategy.
For additional information about Opportunity Equity Strategy performance, please click on the Opportunity Equity Strategy Composite Performance Disclosure. Past performance is no guarantee of future results.
2Significant Contributors and Detractors are based on holdings that had the greatest effect on representative account performance for the week. Holdings that have been in the portfolio since the end of the most recent calendar quarter are identified by name. The net return shown above for each individual security represents the change in market price of the security during the week, according to a third-party pricing service, or for the partial period held in the portfolio during the week. Net returns also include any purchases or sales that were made during the week. For information on how Contributor/Detractor data were calculated and a list showing the contribution to the Strategy’s weekly performance of each investment held at such quarter end, contact us.
Any views expressed are subject to change at any time, and Patient Capital Management disclaims any responsibility to update such views. There is no guarantee that market trends discussed herein will continue. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results, and there is no guarantee dividends will be paid or continued. References to specific securities are for illustrative purposes only. Portfolio composition is shown as of a point in time and is subject to change without notice. Content may not be reprinted, republished or used in any manner without written consent from Patient Capital Management.
©2023 Patient Capital Management, LLC
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