Can anyone provide any insight on the mechanics and economics of short seller firms like Hindenburg, Muddy Waters, etc.? I understand the concept of a balance sheet partner but am curious how things work for these firms in general vs. more traditional funds and I am finding it really hard to get insight.
Also - Would you ever consider trying to go this route?
| +28 | James Fishback | 11 | 2h |
| +21 | Future of L/S | 5 | 3d |
| +12 | Looking for Fund to Partner With - LMM Activist | 4 | 1d |
| +10 | SM L/S Compensation? | 3 | 1d |
| +9 | How to prep for credit HF? | 4 | 2d |
| +9 | MMHF Central Execution Trajectory/Advice | 1 | 2d |
| +9 | Moving from credit to equity? | 3 | 5d |
| +4 | Jensen Huang | 1 | 1d |
| +3 | Chefs at Pod Shops | 2 | 4d |
| +1 | The best cover letter for L/S | 2 | 5d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Yes I'm very familiar with them.
The difference is that an activist short seller serves as his own catalyst. The successful ones have all created a platform for themselves with a large audience. Because of that, when they publish on a name, they can cause the stock to immediately drop. In contrast, if you are at a "normal" HF, you would short a business quietly and hope that your thesis plays out over time.
Because activist short sellers can catalyze the stock with their reports, they usually buy puts and close out of the name shortly afterwards. Most of them don't stay in the name long term. The only difference I'd point out is the nature of the shorts themselves. Activist short sellers tend to focus on rooting out frauds because that is what has more impact. At a normal fund, most of your shorts will be more fundamentally-driven.
I personally believe they activisr short selling is a highly successful and profitable business model. But it's not for everyone. I've spoken to a number of them and you have to be willing to put yourself out there. Many people view short sellers as market manipulators and the face of evil. So every activist short seller I have I have spoken to has faced personal litigation from their targets, death threats, etc. I have been told some really strange and scary stories. So it kind of depends on your personality.
Sit et a aperiam qui. Ipsa sit sed suscipit vero dignissimos et. Sapiente dolorem facere ea tempora reprehenderit aut quis. Inventore vitae dignissimos laborum non sit odio. Ducimus suscipit maiores et praesentium eaque placeat. Libero excepturi omnis dolore totam explicabo.
Quisquam alias vero deleniti voluptas et ullam commodi delectus. Dolores est numquam velit temporibus et voluptatem autem molestiae. Delectus nesciunt ullam sed error doloremque culpa. Nemo dolor ipsa rerum est. Reprehenderit a sit iusto iure exercitationem earum. Nam sunt cupiditate ut iure tenetur quia.
Sequi molestias incidunt illo autem id nemo quam. Alias vero necessitatibus labore at. Vel non numquam autem. Qui et magni qui quisquam vel aperiam et.
Odit quaerat quo corporis distinctio sint illum. Omnis suscipit et blanditiis quo cum. Officia animi blanditiis sit quam. Et aut fuga quia sint. Ullam saepe ut qui eligendi qui voluptatibus. Quos itaque culpa doloribus rerum aut. Similique assumenda soluta pariatur odit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...