market folly

Literally two days ago we detailed how Eliav Assouline and Marc Andersen's hedge fund Axial Capital was buying shares of QLT Inc (QLTI). This trend continues as Axial recently filed another Form 4 with the SEC regarding QLTI shares. On July 6th, 2010, Axial purchased 109,157 shares of QLT Inc. at a price of $5.79 per share. This brings their total ownership up to 6,304,586 shares. Eliav and Andersen's hedge fund has been accumulating shares over the span of a few months now, continuing to buy as QLTI trades lower.

The interesting thing with this play is that many have characterized QLT Inc as a value trap or a 'cigarette-butt' type of investment. It is essentially a play on the biotech company's royalty stream. Some argue that while the stream is healthy now, it is likely to decline. Assouline and Andersen seem to disagree as they continue to accumulate shares.

A little background on the firm for those unfamiliar: Julian Robertson seeded Axial in 2005 and the hedge fund actually resides in the same offices as legendary Tiger Management at 101 Park Avenue. You can view the proverbial 'Tiger Family Tree' of hedge fund managers that Robertson has spawned via that link. As of Axial's last 13F filing, they disclosed $799 million in assets invested in US equities.

Taken from Google Finance, "biotechnology company. The Company is engaged in the development and commercialization of therapies for the eye. The Company focuses on its commercial product, Visudyne, for the treatment of wet age-related macular degeneration (wet AMD), and developing its ophthalmic product candidates."

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