In honor of Nokia Corporation (NYSE:NOK" target="_blank">NYSE:NOK) (BIT:NOK1V" target="_blank">BIT:NOK1V) (HEL:NOK1V)‘s oversized share price gain today, we are looking over the picks from big shortsellers that have been the most painful throughout the year and have performed miserably for them. So each hedge fund losing on their bear calls, can take heart that the others are also losing equally.
Shortsellers: Bill Ackman and Herbalife
Well we would be biased if we didn’t do this first. Due to the blinding media attention on this stock and and the apparent vow of all hedge funds that each one of them will eventually buy this one at some point in time, the shares have rocketed over 100% YTD, much to the dismay of Bill Ackman. While Ackman’s questions regarding Herbalife’s business model may be valid, his method has been called the principal cause for the outsized gains that the stock has seen to date. Critics of Ackman have said that he was too public with the disclosure of his short position, the way he disclosed his $1 billion bet against the herbal supplements company on CNBC and at Ira Sohn Conference has lately become a standard joke, Leon Cooperman and Jeff Gundlach have taken a go at Ackman separately, both have no position in the company. For what its worth, Gundlach would short the company if he were not scared to death of shorting it.
Ironically had Ackman not been this public about his views on Herbalife Ltd. (NYSE:HLF), the bigwigs of the hedge fund industry would have never bought the company. Dan Loeb, Carl Icahn and Paul Sohn of Soros Fund Management bought it after they heard about it from Ackman. Like Gundlach said, “I’ve learned from watching CNBC that announcing your shorts isn’t the best idea because it sometimes invites competition.”
Shortsellers: David Einhorn and Green Mountain Coffee Roasters
Everybody thinks that it is only Herbalife Ltd. (NYSE:HLF) that has leaped up and above and given painful losses to its famous shortseller. Another equally legendary, if not more, hedge fund manager has been just as unsuccessful in one of his largest/most publicized short positions. David Einhorn slammed Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) in last year’s Value Investing Congress and also in the year before that, in an extensive presentation. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has certainly plummeted from the highs of 2011 and Einhorn had a better return in the short in 2012 but this year has been atrocious. Much like Herbalife Ltd. (NYSE:HLF), Green Mountain is up 110% YTD.
Einhorn has repeatedly questioned GMCR’s accounting practices and cost structure, to no avail. Greenlight Capital is up 11.7% for the year after a+0.9% gain in last month. The last time Einhorn commented on GMCR was in his Q2 letter, in which he discussed the continued appreciation in share price despite of disappointing sales in a saturated market.
Shortsellers: Jim Chanos and Hewlett-Packard
Hewlett-Packard Company (NYSE:HPQ) has been one of Jim Chanos’ most popular short positions, and he has many. For the year, Hewlett-Packard Company (NYSE:HPQ) has gained 63%. However Chanos, who is one of the most prescient shortsellers, is unshaken by the consistent gains of the PC maker—he reiterated his negative view on the company in a July interview on CNBC. In fact Chanos has been known to correctly predict the demise of several industries, and he sticks in for the long haul. Chanos had rightfully forecasted the underpeformance of the solar industry, PC/Printer industry and China’s huge credit bubble. In the case of Hewlett-Packard Company (NYSE:HPQ), one of the core faults he pointed out was HPQ’s accounting issues. Months later HPQ was embroiled in a fraud scandal related to the acquisition of Autonomy, which incurred a $8.8 billion writedown. Chanos has most likely shorted HPQ in late 2011 as well, as he has hinted on some occasions. However he publicly revealed his short in HPQ in July 2012.
Another of Chanos’ short bets is Fiat S.p.A. (OTCMKTS:FIATY), shares are up 54% for the year. However to be fair, Chanos has been short Fiat for just over a month now, and in that period Fiat is down 2.6%.
Take a look at the long view on Fiat from ValueWalk’s Rupert H.
Shortsellers: Whitney Tilson and Nokia, K12
Whitney Tilson’s Kase Capital has maintained shorts in Nokia Corporation (NYSE:NOK" target="_blank">NYSE:NOK) (BIT:NOK1V" target="_blank">BIT:NOK1V) (HEL:NOK1V), up 35% for the year and K12 Inc. (NYSE:LRN) which has surged 82%. K12 Inc. (NYSE:LRN) provides technology solutions for the education sector. Tilson shared his short thesis on both companies in his 2012 letter, so this is a fair estimation of his losses. Tilson has also not done well in his bet against InterOil Corporation (NYSE:IOC), which is up 28% for the year.
So it is not just Bill Ackman who is suffering a +100% surge in the stock he is shorting, other big name hedge fund managers are sitting on equal, albeit less publicized losses.