On Monday, July 15,2013, Roddy Boyd of the Southern Investigative Reporting Foundation published an excellent piece (worthy of a prize, if you ask me; PLEASE READ IT if you have not already) about a certain Anthony Davian (a.k.a. @hedgieguy), and what looks like the first twitter-originated ponzi scheme. I’ve been tracking @hedgieguy, on and off, for the last 2-3 years, and would like to provide the public with my take. I privately expressed my concerns about @hedgieguy with several people, over the last 1.0-1.5 years (even as others shared their concerns about Davian with me as well). Sometime in Q2 of last year, I told my friend:
me: I actually don’t understand why that guy sells newsletters, if he’s managing $100-200 million. something doesn’t make sense. It doesn’t add up.
XXX: Who are you referring to you. Mr Ching (our nickname for Davian who often tweeted “CHING CHING” sound of cash register) ?
me: Yes, Mr Ching.
XXX: That can’t be right and I will tell you why…
I only wish we looked into his operations more closely… who knows, maybe we would have been able to save some people their money. Maybe not. Rather than tell you “I saw this coming” or “I knew it” after the fact, the below shows you exactly what I and few others said before Roddy Boyd’s exposé. This post is intended to complement Mr. Boyd’s exceptional work.
WHY @HEDGIEGUY SEEMED TOO GOOD TO BE TRUE, BEFORE THE FACT (PRESENTED CHRONOLOGICALLY)
To start off, a few disclosures: I’ve never met with Mr. Davian, nor have we spoken over telephone. We exchanged a few e-mails, twitter direct messages, and public tweets. That is the extent of my correspondences with Davian. I’ve never had any business ties with Davian (or his affiliates). I never purchased nor tried any of his (or affiliates’) goods or services. Finally, I never recommended any of his (or his affiliates’) goods or services to anyone.
I started following @hedgieguy on twitter sometime in 2011 (I believe in Q2 or Q3). I was largely focused on shorting Chinese reverse merger stocks at the time, and followed [email protected] because he seemed interested in them as well. I eventually unfollowed him sometime in 2012. The below summarizes my experience with @hedgieguy , and shows how I came to believe his claims of managing $100-200 million were simply too good to be true:
(XXX refers to several different individuals)
Q3 – Q4 2011: @hedgieguy and I start corresponding publicly via twitter in Q3 2011. Friendly dialogue about stocks. We were probably both in good spirits, as the Chinese reverse merger shorts were working exceedingly well. In Q4, my well timed short GMCR call (pure luck, as the call was made pre-David Einhorn’s now famous October presentation, “GAAP-uccino”) got many people’s attention; @hedgieguy seemed to benefit from that trade as well. He started promoting me via Re-Tweets, etc. Our correspondences remained largely cordial through Q4 2011. That said, I started getting concerned by the fact he seemed perfectly fine going long (and even promoting) complete fraud stocks, just for possible short squeezes, even as he had vocally spoken out against the fraudulent Chinese reverse merger stocks. It seemed completely hypocritical to me.
11/14/2011: XXX: Very competitive bloke (hedgieguy), funny though. He always gets it right every week. He must be making a fortune for his partners.
Q1 2012: The red flags concerning @hedgieguy start growing noticeably, even as his flattery towards me increases (starts getting uncomfortable).
1/9/2012: XXX: Wow this guy hedgieguy unfollows me for RT’ing something from XXXX. Don’t want to talk to someone who ignores b/c u r friends with someone.
1/9/2012: “He is what is wrong with the business”:
me: you are now the 2nd person to now express (legitimate) ill feelings lol. it’s not even a single thing.
XXX: nope. he is a ___ and a stock pumper
me: it’s hard for me to disagree
XXX: he is what is wrong with the business
Q2 2012: Davian gets nasty towards me and others; certain behavioral red flags become increasingly apparent. By the end of Q2, I suspect that @hedgieguy is too good to be true.
5/4/2012: Hedgieguy has the gall to ask XXX to connect on LNKD, after publicly insulting one of XXX’s friends
XXX: so that HedgieGuy asked to connect on LNKD after getting mad about my friendship with XXXX
me: he acts like the very pump n dumpers he shorts, etc.
5/28/2012: Hedgieguy makes fun of people who tweet on a Friday night (and then tweets 10 times later that Friday night)
me: It’s even worse. For example, yesterday he tweets, ”Judging from what I see. Only no life geeks post a lot of tweets on the weekend. Get out of mom’s house guys!”
XXX: oh geeze. so you responded to that?
me: No I did not. He made fun of of other people tweeting on a Friday night, and then he proceeds to tweet ten times on a Friday night.
me: He also tweeted: “‘To wall st/financial types: no one gives a fuck about your CFA studying. As hard as you try to high jack this holiday, it’s not about you!’
XXX: oh boy, you can appreciate memorial day and still study for the CFA. They’re not mutually exclusive.
6/17/2012: I explain why Hedgieguy is too good to be true
me: I actually dont understand why that guy sells a newsletters, if he’s managing $100-200mm. something doesn’t make sense. doesn’t add up
XXX: who are you referring to you. Mr Ching?
me: yes, Mr Ching
XXX: That’s can’t be right and I will tell you why
me: that tells me he doesn’t. right, we’re in agreement, I want to hear your reasoning.
XXX: In October 2011, he said he made 20% for the month. Do the math, Its bullshit
me: I’m with you. I think if there’s any truth to what he’s claimed, it’s that the 100 million is not hedge fund/LP money. stuff I don’t understand, but is NOT under the 2/20 structure.
XXX: Did he say on the stream he manages 100mm. Or through your sources
me: I don’t remember, sorry
XXX: Let me tell you something. Its a “no no” to disclose your AUM on twitter to begin with.
me: I would think so, unless it’s already out there. if you are Bill Gross or John Paulson, your information is so public lol
XXX: Maybe so, however, that’s promoting your fund. Its illegal.
me: good point, no marketing of your fund, right
XXX: Yes. I have not done any research on this guy, because one look at his website, and I said, yeah whatever. Unprofessional website.
Q3-Q4 2012: Davian insults David Einhorn’s friends/fans … and then proceeds to cheer on and compliment Einhorn.
me: he was quite something. I couldn’t believe my eyes. You know what he said? So few days ago, he was making fun of people cheering david einhorn (he’s at the Vegas poker tournament). Then the next day.. the next day!!! he talks about how nice a person einhorn is, and that he hopes einhorn wins the tournament! Is hedgieguy on drugs?? The guy makes fun of other people for doing x, and then does x the next day!
XXX: What a fuckwit
Q1 2013: “another one to be careful of is @hedgieguy”
me: so it angered me seeing this guy behaving just like the very ppl he