A new database has tracked the biggest winners and losers in activist short-selling. Pershing Square’s Bill Ackman, despite Herbalife, is one of the best; David Einhorn of Greenlight Capital, isn’t.
Brendan Mcdermid / Reuters / Reuters
In the hedge fund world, it's one thing to be a short seller. It's quite another, however, to be a short-selling activist — someone who publishes their short ideas in an effort to garner public support to bring down a company.
Some short activists endure long, very public campaigns, the attention-seeking nature of which can sometimes backfire. Still, there's a lot of money to be made, and even sometimes a fraud to be uncovered, when a short activist is right, according to a new database, Activist Shorts Research, which has aggregated publicly available data on the performance of short activist campaigns. In fact, Activist Shorts' first study found that following a short activist on an investment for a week after announcing their position produced an average 12.5% return for an investor.
Here's a look at the best and worst in the short activism game.
Alfred Little: -62.8% Return
Alfred Little, a shop with 15 activist short campaigns under its belt, has seen the stock fall dramatically at nearly every single company its gone after. Most notably, it had short investments in three companies believed to be major business frauds, where the stock declined more than 90% after Alfred Little introduced its position. In fact, all but one of the fund's shorts had a declining stock price.
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