Top of Activist Short Selling (so far) in Q3
by Breakout Point, on Aug 27, 2020 5:13:00 PM
Even during this typically quieter summer period, activist short sellers were very active and have so far red-flagged 27 public companies in the third quarter.(*)
While the S&P index has so far risen fairly steadily in Q3 and has gained about 12% this quarter, activist short sellers have managed to find plenty of alpha on the short selling side. On average, 27 freshly targeted stocks are trading 7.3% lower than before the short calls.
Not surprisingly, and similar to other observation periods, the highest number of targets of short activists were US-listed and US-based companies. The average market capitalisation of 17 US stocks highlighted by short sellers was just over $4 billion.
The European companies have been targeted three times so far in Q3, with one company each from France, Germany and the UK being targeted.
Enter to win a free short-selling data analytics!
Top Performing Short Calls
Among top performers, two most recent calls were from August 19. These were short calls on Blink Charging Co by Mariner Research and Culper Research. Both targeted this, at the time, about $300m big company focused on charging stations due to allegations of serious red flags connected to corporate governance. As of close on August 26, shares were down 28 percent versus prior to the report.
Wolfpack vs Dave Portnoy
Two best Q3 performers are two short calls from Wolfpack Research. Wolfpack is led by Dan David that you might know from the great documentary about short sellers and US-listed China-headquartered firms, 'The China Hustle'.
Immediately after Wolfpack made short calls on Microvision (-36% since the short call) and Remark Media (-40.3%), an interesting dynamic developed between the short seller and the world's most famous retail investor, Dave Portnoy. This happened, as both Microvision and Remark Media were part of the Davey Day Trader's portfolio. If we take stock performance as a sign, so far it looks as a 2:0 for Wolfpack. Here is what Portnoy had to say to New York Post about the losses in Remark:
Looks like @stoolpresidente took a bath on $MARK before closing the position— Contrarian Investor Podcast (@PodContrarian) August 14, 2020
At the very least Davey has less conviction here than @WolfpackReports
(As an aside, our conference keeps getting mentioned in these pieces, which is nice) pic.twitter.com/kZqIT6RDmb
* Note: Presented data and analytics is as of available on 2020-08-26-22:00h UTC.
The services and any information provided by Breakout Point or on the Breakout Point website shall not be, or construed to be any advice, guidance or recommendation to take, or not to take, any actions or decisions in relation to any investment, divestment or the purchase or sale of any assets, shares, participations or any securities of any kind. Any information obtained through Breakout Point and its services should never be used as a substitute for financial or other professional advice. Any decisions based on, or taken by use of, information obtained through Breakout Point and by its services are entirely at own risk.