Activist short sellers who go by a pseudonym outperform those whose identity is known, according to research by Activist Insight to coincide with the launch of its short seller database, Activist Insight Shorts.
Stocks targeted by anonymous short sellers declined by an average of 28% in the two years after the campaign became public versus a mere 20% decline over a comparable period for short sellers who operate in the public eye.
Both kinds of activist short seller use online postings to convince the market to dump stocks they believe are overvalued or fraudulent, and anonymous short sellers are becoming more commonplace.
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According to Activist Insight Shorts, 58 campaigns were led year-to-date by anonymous activist short sellers, compared to a record high of 67 last year and just 31 in 2013. The number of campaigns led by known short sellers peaked in 2015 at 215, and declined to 196 in 2016 and 110 year-to-date.
Number of campaigns by short seller type.
* YTD figures as of November 16, 2017
The outperformance may be because anonymous short sellers are more likely to target smaller companies, according to Activist Insight research. Year-to-date, 84% of their targets were under $2 billion in market capitalization, compared to 65% for known short sellers.
Anonymous short sellers have been behind some of the year’s most successful calls, including “The Friendly Bear” at Acqua Metals, while two anonymous short sellers kicked off a campaign at $1.3 billion market cap healthcare company MiMedx.
For any questions about the data, or if you have a follow-up request, please contact Josh Black at [email protected] Please note that bespoke data requests may take 24-48 hours depending on the amount of manual work required.
About Activist Insight
Since 2012, Activist Insight has provided its diverse range of clients with the most comprehensive information on activist investing worldwide. Regularly quoted in the financial press, Activist Insight is the trusted source for data in this ever-evolving space. Activist Insight offers four great products: Activist Insight Online, Activist Insight Shorts, Activist Insight Vulnerability and Activist Insight Monthly magazine, and counts many of the world’s leading investment banks, law firms, shareholder communications firms and institutional investors as its clients.
Article by Activist Insight