I’m not sure if you know how hedge funds usually work but the...

I’m not sure if you know how hedge funds usually work but the short version is you give them your money they charge you a management fee and usually a performance fee if they outperform a specific benchmark. They have an investment objective that is usually a bit like a black box ie u don’t actually know how they make a return nor do you know the exact percentage of exposure to an individual stock you just have units in the overall fund. What fundies do practice however is risk control so they will never let a stock grow to be too large a percentage of the overall portfolio because if it does it may tank and impact the funds overall performance. In the case of Cap 51 they got their exposure very early so when the price got close to $4.00 it was above the risk metric and the position needed to be reduced. Usually the fund manager will then sell a portion of the investment to bring the allocation below the risk metric. I see lots of people on HC saying that XYZ fund is getting out however often what they are doing is just rebalancing after a run up to reduce risk. So here is where it gets interesting, rather than sell down Scott said we are going to carve out the PAR allocation from the main fund and create a seperate fund with just PAR in it because we don’t want to sell down because we believe PAR is going a lot higher. I have never seen a fund manger do this before and it shows their commitment to PAR. this allocation has subsequently tanked like all PAR exposure but it does not impact the main funds performance and we get to retain our holdings in PAR.