About Us
- Home
- /
- About
Management
Investment Philosophy
Lemelson Capital Management has advocated a Christian Philosophy of investment based on a belief that investments selected on strict value criteria mitigate risk and often lead to better than average returns, a cornerstone of good stewardship.
Although every situation and investment decision is unique, the pillars of wise investment policy (autonomous thought, discipline, knowledge, patience, focus, hard work, etc.) do not change with time.
Chief Investment Officer
Fr. Emmanuel Lemelson, CIO
Rev. Fr. Emmanuel Lemelson is a Greek Orthodox priest and activist investor known for advocating a philosophy of investment based on Christian ethics.
He is the chief investment officer of Lemelson Capital Management, LLC the sole sponsor and general partner of The Amvona Fund, LP which several times has been named the world’s top-performing hedge fund according to financial media outlets The Wall Street Journal and Barron’s.
His investment research and analysis have been cited in The Wall Street Journal, Bloomberg, CNBC, USA Today, New York Post, Fox Business Network, Fortune, Forbes, Barron’s, Business Insider, International Business Times, Reuters, MarketWatch, and TheStreet.com and credited with influencing share prices in publicly traded companies, while his ongoing battle with U.S. regulators over Ligand Pharmaceuticals (NASDAQ: LGND) continues to make headlines.
Barron’s has called Lemelson an “outspoken” short seller who “wouldn’t settle.”
Lemelson’s role as a mentor and advisor to global star Mark Wahlberg was featured in the HBOMax docuseries Wahl Street.
His position on ecumenism and the role of the Orthodox Church has been cited in The Washington Post, CBS News, Fox News, The Boston Globe, and The Boston Herald among others. Lemelson has also been cited in and written for The National Interest.
Prior to his ordination in 2011, Fr. Emmanuel had 17 years of experience as a successful entrepreneur, including authoring multiple patents in design, business process, and software architecture. As a graduate student, he founded, amongst other businesses, the internet site Amvona which achieved ~120% CAGR between 1999 and 2006. In 2005 Amvona ranked among the ten most-visited photography-related internet sites.
He is the founder and president of The Lantern Foundation, a 501 (c)3 private foundation that provides financial support to Christian organizations as well as the founder of the Stowe conference for charity.
Fr. Emmanuel graduated from Seattle University with a B.A. in Theology and Religious Studies and Holy Cross Greek Orthodox School of Theology with an M.Div and has served parishes in New England and Switzerland.
Read more at http://amvona.com/about-us
History
Social Commentary and Activism
In 2010, Fr. Emmanuel Lemelson began to write and publish extensively on investment-related topics, including security analysis, a Christian philosophy of investment, and ethics. Lemelson has been critical of fraudulent practices in the securitization of mortgage-backed securities and a proponent of long-term investments in U.S. stocks. Lemelson’s articles on mortgage-backed securities have been cited widely in relation to the landmark cases U.S. Bank National Association v. Antonio Ibanez and Francis J. Bevilacqua v. Pablo Rodriguez, in which the Massachusetts Supreme Judicial Court held that financial institutions that did not hold both mortgages and the notes had no legal standing to pursue foreclosure proceedings against residents of these properties.[1]
It is now widely-held that fraudulent mortgage-backed securities were a significant contributing factor to the 2007-09 U.S. housing correction and the ensuing U.S. recession.[2] Lemelson’s writings on these issues have been cited by SeekingAlpha, ZeroHedge, Anonymous, Occupy Wall Street, the Massachusetts Registry of Deeds, and by attorneys and litigants involved in mortgage securitization litigation.[3][4]
In August 2014, the financial media outlet Hedge Fund Alert reported that Lemelson had reached an agreement with U.S. Bank after challenging the right of the bank’s securitization trust to collect the principal and interest on a mortgage Lemelson took out in 2006. As part of the settlement, Lemelson received $1.2 million in principal, interest, and fees.[5]
Lemelson also has received considerable media recognition as an activist investor, including regular appearances as a guest on the “Pre-Market Prep” radio show of Benzinga, [6] while his research and analysis have been cited in The Wall Street Journal, Bloomberg, CNBC, USA Today, New York Post, Fortune, Forbes, Barron’s, Business Insider, International Business Times, Reuters, MarketWatch, TheStreet.com CBS News,[7][8] Fox News,[9] Fox Business Network and other media outlets.[10]
In a November 5, 2015 interview with Fox Business Network, Lemelson criticized the Federal Reserve for keeping interest rates artificially low, saying:
“We’ve been in uncommon monetary policy for about ten years. This has led to tremendous income inequality in the world. The top 85 people in the world control the same wealth as the bottom 50 percent; that’s 3.5 billion people. When you have interest rates that are that low and cheap money, you’re going to inflate asset prices, and that’s the conduit of wealth for the rich. But for the rest of the world, one in nine people don’t have enough to eat, and one in seven live off about a $1.25 per day, so a large part of that income is going to basic necessities like food. As leaders in the world economically in the U.S., we have to be very cognizant of the impact of low interest rates and quantitative easing.”
Watch: Fr. Emmanuel on Fox Business News Varney & Co. here
Investor Activism
Since 2013, Lemelson’s Amvona Fund had been named three times by Barron’s as one of the world’s top-performing hedge Funds.[11][12][13][14] In May 2013, Lemelson Capital Management was ranked by Morningstar in the top one percent of its peer group in its “U.S. Long/Short Equity” category. In 2014, the Fund was named by Preqin as one of the world’s top-performing event-driven hedge Funds.
Lemelson’s activism and commentary in relation to several of The Fund’s commitments, including Geospace Technologies, Kulicke & Soffa Industries, Lumber Liquidators, Ligand Pharmaceuticals, Skechers and World Wrestling Entertainment have been the subject of considerable media attention.[15][16][17][18][19][20][21]
World Wrestling Entertainment (NYSE: WWE)
On March 17, 2014[22] and again on April 8, 2014,[23] Lemelson authored and published analysis that World Wrestling Entertainment (WWE) was substantially overvalued and should be shorted.[24] Lemelson’s analysis was credited by USA Today, The Street, Seeking Alpha, and other major media outlets with an $800 million drop in the market capitalization of the stock between March 18 and April 20, 2014. [25][26][27][28]
On May 16, 2014, following a $1.4 billion (63 percent) loss in WWE’s market capitalization since Lemelson’s initial March 17, 2014, short call, Lemelson announced that he had reversed his short position and was now long WWE stock.[29][30] Simultaneously, Lemelson called for the replacement of WWE’s executive management team or a sale of the company.[31][32][33] This followed what Lemelson said was “a period of ongoing losses, execution failures, and material misstatements.”[34][35][36]
Several hours after Lemelson’s announcement, former Louisiana Attorney General Charles Foti announced that his law firm would begin an investigation into whether WWE had violated state or federal securities law.[37] Following Lemelson’s May 16, 2014 call for changes at WWE, the company announced that it was cutting its staff by seven percent, and its stock price appreciated from its May 16, 2014 closing price of $11.27 to $16.40 on February 13, 2015.[38][39] On March 30, 2015, USA Today reported that Lemelson Capital Management, LLC, in February 2015, had sold its stake in WWE at $16.50.[40][41]
On October 27, 2016, following WWE’s Q3 2016 earnings conference call, The New York Post[42] and other global financial media outlets reported that WWE CEO Vince McMahon was open to selling WWE.[43]
On January 31, 2020, Forbes reported, as called for by Lemelson, that WWE had fired its co-presidents, including George Barrios.[43a] On June 17, 2022, CEO Vince McMahon stepped away from his duties as the company’s board investigated allegations of misconduct.[43b] According to The Wall Street Journal, McMahon, World Wrestling Entertainment Inc.’s longtime leader, agreed to pay more than $12 million over the past 16 years to suppress allegations of sexual misconduct and infidelity.
On July 22, 2022, McMahon “retired” amid ongoing probes into alleged misconduct.
On July 25, 2022, CNBC reported that The company expects to conclude that its “internal control over financial reporting was not effective as a result of one or more material weaknesses.”
On August 9, 2022, in an SEC filing, the company announced it would be filing its quarterly report late, after discovering an additional $5mm in unrecorded payments (made by McMahon) bringing the total to $19.6mm and that the company would revise previous financial statements spanning multiple years.
On April 3, 2023, the company was sold to Endeavor.
Kulicke & Soffa Industries (NASDAQ: KLIC)
On April 22, 2014, Lemelson’s announcement that he was building a stake in the stock of semiconductor and LED equipment maker Kulicke & Soffa Industries and urging the company to authorize a share repurchase plan[44][45] sent shares of the stock soaring ten percent.[46][47][48] Following the call, USA Today reported:
“Kulicke & Soffa Industries jumped nearly 10% Tuesday after Lemelson Capital Management announced it was building a stake in the semiconductor and LED equipment maker, saying the company is “absurdly” undervalued… Lemelson made news earlier this month when the investment firm said pro wrestling firm World Wrestling Entertainment was way overvalued, sending the shares down more than 35%”[49]
Kulicke & Soffa shares surge after investor urges buyback,” by Gary Strauss, USA Today, April 22, 2014
Four months later, on August 27, 2014, Kulicke & Soffa heeded Lemelson’s share repurchase recommendation, announcing that its Board of Directors had authorized a share purchase of up to $100 million. [50][51][52]
Ligand Pharmaceuticals (NASDAQ: LGND)
On June 16, 2014, Lemelson released a 25-page research report on Ligand Pharmaceuticals. The report concluded that severe competitive threats to Ligand’s key royalty programs, going concern risks and other challenges were so significant that the stock had no intrinsic value.[53][54][55][56] Three weeks later, on July 3, 2014, Lemelson announced that he had further increased his short position in Ligand and released an appended 12-page research report questioning the commercial viability of Ligand’s products and reaffirming its position that downside risk for Ligand was “100 percent.”[57][58] The July 3, 2014 report also chronicled accounting malfeasance at Ligand, particularly as it related to the company’s reporting of debt expense and the handling of its ownership stake in Viking Therapeutics (NASDAQ: VKTX).
On August 4, 2014, in a follow-on report, Lemelson wrote:
“Kyprolis also faces an extraordinary competitive threat from two entrenched multiple myloma (MM) indications, Celgene’s (NASDAQ:CELG) Revlimid and Takeda Pharmaceutical Company Limited’s (OTC:TKPYY) Velcade.” [59]
On August 14, 2014, Lemelson, in an additional follow-on report, specifically called attention to solvency risks and misrepresentations made by Ligand in it’s proposed bond offering.
On November 18, 2014, Yahoo Finance reported that Lemelson had covered his short position at an approximately 40 percent return.[60]
In September 2016, Amgen Executive Vice President of Research and Development Sean Harper noted that a late-stage Kyprolis study did not meet its goal in improving progression-free survival versus Velcade in patients who had not yet been treated for the disease, bearing out Lemelson’s August 4, 2014 prediction regarding Kyprolis. Shares of Ligand plunged as much as 13 percent on the news.[61]
Subsequently, in November 2016, Ligand announced that it would restate its financial statements for multiple quarters due to a material error and that the company did not maintain effective controls over the accuracy and presentation of its accounting.[62][63] The company was also forced to write-down the value of its equity stake in Viking Therapeutics, both events predicted in Lemelson’s reports.
By late 2016, ten U.S. law firms announced investigations into Ligand for breaching their fiduciary duties to shareholders and for securities fraud. During this same period, eleven U.S. law firms filed class-action lawsuits against Ligand, alleging materially false and misleading statements by the company and its management.
Ligand’s stock subsequently fell as much as 40 percent from its 2016 highs.
On December 19, 2016, Lemelson released a nine-page letter to the U.S. Senate Special Committee on Aging summarizing extensive alleged abuses of accounting, pharmaceutical reimbursement and classification guidelines and regulations by Ligand and urged the U.S. Food and Drug Administration, U.S. Department of Health and Human Services, and other appropriate federal and state regulatory and investigatory bodies to evaluate whether, in these and other business practices, Ligand has abused the Orphan Drug Act and other statutes and regulations in order to dramatically increase the prices of its drugs.[64][65]
By late 2016, the problem of accounting malfeasance and drug pricing in the pharmaceutical industry had received broad attention globally in part due to revelations at Mylan and Valeant Pharmaceuticals. President Trump also took to speaking publicly and repeatedly of these problems during his 2016 presidential campaign as well as during his early presidency.[66]
On February 3, 2017, U.S. Senators Susan Collins (R-ME) and Claire McCaskill (D-MO) reintroduced the Increasing Competition in Pharmaceuticals Act, which would ensure that a clear process is in place for FDA to prioritize the review of generic drug applications. The Increasing Competition in Pharmaceuticals Act would help increase competition to lower prices and avoid monopolies as well as deter practices that can lead to exorbitant price hikes on drugs that were previously affordable to patients for decades.[67]
In late March 2017, it was reported that Scott Gottlieb, President Trump’s pick to head the U.S. Food and Drug Administration, would make streamlining approval of generics his top priority and would be particularly focused on complex medications that combine old drugs with newer delivery devices, as well as those with unusually complicated formulations.[68]
On July 13, 2018, Lemelson published a second open letter to Congress, citing the SEC’s failure to prosecute the alleged multi-year accounting and securities fraud perpetrated by Ligand, stating that it diminished The Commissions credibility and warranted investigation:
“Ligand’s accounting and business model is by design opaque and complex,” Lemelson said in his 2018 letter. “The SEC, by ignoring the warnings about Ligand, despite a multiyear effort to explain the fraud in clear and simple terms, has categorically failed in its core mission.” [69]
On July 30, 2018, Viking CEO Brian Lian appeared on Bloomberg News and stated that Viking’s stock was trading at “a tremendous discount.” The shares had closed the prior trading day, Friday, July 27, 2018, at $10.59 per share.
On July 31, 2018, Bloomberg Law reported that the company’s bondholders sued the company, accusing Ligand of backdating its bond indenture in an effort to deny them more than $3.8 billion in payouts.[69e]
On September 13, 2018, Bloomberg reporter Matt Levine, stated, “Ligand is fine and a $5 billion company now.”[69f]
On October 15, 2018, global financial media outlet Barron’s reported that the SEC charged Lemelson, “accusing him of making false statements” about Ligand Pharmaceuticals and making $1.3 million in profits by “driving down and betting against” the stock of the company. According to Barron’s Lemelson condemned the SEC case as ”an effort to destroy the reputation of a whistle-blower.”[69c][69d]
The SEC, in its complaint, promoted Ligand’s stock price, stating, “…today, Ligand stock trades at over $250 per share.”
In the ensuing ten months, Ligand’s share price, plummeted as much as 70 percent, destroying billions of dollars in shareholder value.[70e]
By early 2019, the problem of skyrocketing drug prices had become a broad bi-partisan issue in Washington.
On July 16, 2019, after reporting a 70.27 percent net return in the first half of the year, Lemelson announced that his Fund had continued to expand its investor base,[70] and that after covering his successful short positions in Ligand in 2014 and again in 2015, revealed a third “profitable” short position in the company.[70c][70d]
On July 30th, 2019, Lemelson announced he had increased his short position in Ligand and called on the US Attorney’s office for the Southern District of California to investigate the company, stating:
“the SEC has ignored the red flags and botched opportunities for a proper investigation of the company,”.[70e]
On January 21, 2020, Lemelson reported net returns of 151 percent for FYE 2019, stating, “We concluded 2019 with our highest rate of return and largest investor base ever,”[70f]
On February 19, 2020, global financial media outlet Barron’s reported that “In his Jan. 28 order, U.S. Magistrate Donald Cabell noted that the SEC had also been urged to investigate Lemelson in a letter from Duncan Hunter, the congressman who represented Ligand’s California district until his recent guilty plea for misusing campaign funds.”
In his ruling, Judge Cabell found that Lemelson had asserted enough facts “to warrant discovery on his claim of selective enforcement and bias,” and cited an August 2014 email between Ligand “executives” stating that “He [Lemelson] needs to be silenced for good.”[70g]
Before the market opened on February 27, 2020, Ligand issued a press release announcing: “Ligand Raises 2020 Financial Guidance Due to Higher Captisol Material Sales.” The company announced that the sales were expected to be approximately $40 million, up from previous guidance of approximately $35 million. According to Ligand, this changed the company’s expected total revenues from approximately $128 million to $133 million—not a material amount. The release was made during the height of the market’s jitters related to the coronavirus pandemic. Ligand’s stock price closed the prior day, February 26, 2020, at $102.62. Based on the above release, Ligand’s stock price opened nearly 7% higher at $110. Within a few minutes, Ligand’s stock price skyrocketed an additional 10% to $122.08. The stock then quickly collapsed, closing at $103.36, well below where it opened and less than 1% higher than the previous day.
The following day, February 28, 2020, Ligand’s stock closed down 9.44% at $93.60. It hit a low of $88.64, which is a more than 27% drop from the previous day’s high when Ligand President and COO, Mathew Foehr, sold 7,225 shares of LGND at an average price of $110, for a total sale of $794,750.
On February 28, 2020, Ligand Pharmaceuticals CEO John Higgins appeared on CNBC to discuss “how [the] company’s helping find a cure for the coronavirus,”[70h] stating “In this case with Remdesivir… tremendous efficacy.” Following these statements insiders at Ligand sold shares.
On March 16, 2020, Ligand’s share price fell to an intra-day low of $57.24 per share, wiping out about 80 percent of the company’s market capitalization and destroying approximately 5 billion dollars in shareholder value since late September 2018, shortly after the SEC announced its charges against Lemelson.
On October 15, 2020, Reuters reported that “the WHO said on Thursday its “Solidarity” trial had concluded that remdesivir appeared to have little or no effect on 28-day mortality or length of hospital stays among patients with the respiratory disease.”[70i]
On January 26, 2022, the Pomerantz law firm announced it was initiating an investigation into whether Viking and certain of its officers and/or directors had engaged in securities fraud and or other unlawful business practices.
In June 2022, Viking Therapeutics traded, intra-day, as low as $2.02 per share, dropping about 89% since late September 2018 (around the time SEC v. Lemelson et al. announcement), and 70.66 percent since Viking CEO Lian’s July 2018 Bloomberg interview where he boldly proclaimed the shares were trading at “a tremendous discount.” Ligand, for its part, plummeted over 70% during the same time. Collectively, the companies have destroyed billions of dollars in shareholder value.
The benchmark S&P 500 TR rose about 33.56 percent during the period.
Lumber Liquidators (NYSE: LL)
On March 3, 2015, Lemelson criticized allegations leveled by hedge Fund manager Whitney Tilson on 60 Minutes against Lumber Liquidators, a U.S.-based hardwood flooring company, in which Tilson alleged that the company’s products deliberately contained formaldehyde, violating health and safety standards. Lemelson pointed out errors in Tilson’s 60 Minutes allegations, concluding that Lumber Liquidators senior management “was not the source of the directive to use the toxic substance.” [71][72][73]
Lemelson’s criticism of the allegations was later validated on December 14, 2015, when Tilson reversed his position, writing that “senior management of Lumber Liquidators wasn’t aware that the company was selling Chinese-made laminate that had high levels of formaldehyde.” [71][72][73] The stock jumped 20 percent immediately following Tilson’s admission. [74]
Skechers (NYSE: SKX)
On September 25, 2015, the financial media outlet Benzinga reported that Lemelson was short Skechers, an NYSE-traded footwear company, at an average (adjusted for a 3:1 stock split) cost of $132, calling it “radically overpriced.” Lemelson said that he would continue to short the stock, which he said was vulnerable to a “precipitous fall.” Lemelson was quoted in the media as “valuing the stock in a range of $13-$20 per share.” [75]
Twenty-seven days later, on October 22, 2015, shares of the company plunged more than 30 percent in one day following disappointing earnings. [76][77]
On October 21, 2016 shares of Skechers closed at $18.98 per share, within the range Lemelson had forecast on October 23, 2015.
Geospace Technologies (NASDAQ: GEOS)
On December 1, 2017, Reuters reported that Lemelson had published an open letter to the Board of Directors of Geospace Technologies (NASDAQ: GEOS urging a share repurchase program and had acquired shares for his flagship Amvona Fund.[77b]
In February 2018, he published another open letter to the board of directors of the company calling for the removal of the CEO and CFO and the sale of the company.[78] Lemelson later disclosed in a May 15, 2018, regulatory filing that it was no longer a passive investor in the company and controlled 9.3% of Geospace’s shares.[79][80][22]
On November 21, 2019, Geospace Technologies announced that the company’s CFO would “retire.”[81]
On November 19, 2020, Yahoo Finance reported that Geospace’s Board of Directors had authorized a stock repurchase program.[82]
See References
In @Lemelson v. #SEC the enormous power of the government is on full display. This free speech threat, to quote the late Justice Scalia, ‘comes as a wolf.’
#ActivistShorts $LGND $VKTX #Lemelson #FirstAmendment #FreeSpeach
.@Lemelson will join @LemelsonCapital on the Q2 2023 investor call on July 14. The call will include prepared remarks by management, an update on Q2 2023 activities, market commentary, and a Q&A session. #LCM #Lemelson
.@Lemelson will join @LemelsonCapital on the Q4 2022 investor call on January 18. The call will include prepared remarks by management, an update on Q4 2022 activities, market commentary, and a Q&A session. #LCM
.@Lemelson will join @LemelsonCapital on the Q3 2022 investor call on October 21. The call will include prepared remarks by management, an update on Q3 2022 activities, market commentary and a Q&A session. #LCM
Interviewed a very interesting guest this week: Father Emmanuel @Lemelson, CEO of hedge fund @LemelsonCapital
Spotify: