The Most Prolific Shortsellers

Activist short sellers have ramped up activity this year. During the first half of 2020, dozens of stocks have seen wild price swings. Many biotech companies saw their stocks skyrocket after they joined the race to develop a COVID-19 vaccine. The rise of the so-called Robinhood traders has also caused many stocks to behave irrationally, giving activist short sellers some lucrative opportunities. Here we take a look at the most prolific activist short sellers in the first half of 2020.

Hear top shortsellers present their favorite ideas!

Shorting amid the rise of ‘retail bros’

The current market uncertainty and wild swings mean a short seller needs to have a strong conviction in their bets. Thanks to the stay-at-home Robinhood traders, a bankrupt stock could rise 1000% in just a few hours.

The activist short sellers have jumped in with shorting strategies that Breakout Point labelled as “inverse Robinhood strategies.” They have targeted stocks hyped up by traders. Some of their short calls have delivered handsome campaign returns.

But many stocks they targeted have shot up despite the short seller making serious allegations about the companies. For example, Wins Finance Holdings has gained about 30% since Hindenburg published its short thesis.

Most prolific short sellers

These are the most prolific activist short sellers in the first half of 2020. Breakout Point has listed them based on the number of short calls in H1 2020. There were 91 major activist short calls in the first six months. Just eight short sellers accounted for nearly 54% of those calls.

Most Prolific Activist Short Sellers

Hindenburg Research was the most prolific activist short seller with 15 short calls. Hindenburg founder Nate Anderson told Breakout Point that 2020 presented “more opportunities than ever.”

Its most successful short call was the Hong Kong-listed China Metal Resources. The stock sank about 84% after Hindenburg published its report. Hindenburg had alleged that the company engaged in dubious accounting practices and stock price manipulation. The activist short seller also made big money shorting Genius Brands International Inc and Pharmacielo Ltd.

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Disclaimer: The opinions in this article are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit ...

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