2023: Year of Newcomer Activist Shorts

2023: Year of Newcomer Activist Shorts

2023 was a busy year for short activists. We saw plenty of household names release their take on over 120 stocks. However, we also noted many newcomers who were previously rather unknown to the public. This post focuses on their activity and track record. We counted 11 newcomers this year, releasing research on 22 stocks. 

The beginning of 2023 was marked by a lot of interest in all things banking. Dirty Bubble Media, a prolific Twitter account with a Substack newsletter, closely followed developments of Signature Bank (SBNY). While there were many activists scrutinizing SBNY’s dealings with the crypto world, Dirty Bubble was one of the few to write up a report. 

As we know, the short call was tremendously successful. Dirty Bubble released their first call, and the stock went to zero. After this, they also targeted Coinbase in March and Charles Schwab in April, but these have not yielded the same results. The activist is focused on crypto. Thus it is uncertain whether they will continue their stock-specific research, but in any case, Dirty Bubble is writing probing and sceptical research suitable for many market participants. 

A newcomer who is likely to stick around and perhaps continue posting stock-specific campaigns could be Sunshine Research. Through their Substack, they launched three campaigns this year. The best outcome so far is in ChargePoint Holdings (CHPT), which dropped to the 50% downside target raised by the activist.

Another one that is likely to stick around is Capybara Research. The activist came on the scene in July, and so far notched three successful campaigns all focused on similar allegations of stock promotion. The first one, is already down over 70% since the report. the second is down 42%, and theis latest target, a company dealing with a beverage that aims at lowering blood alcohol levels, is down by about 23%. 

Recently, Capybara got support from J Capital regarding one of their targets. 

Given the targets, Capybara also got the usual short-seller treatment early on. They are seemingly sued by two of the companies they wrote about and already established themselves with the regular ‘fan base’ of bulls who do not like to be told about potential issues related to their stock.

Probably the most followed newcomer is Guasty Winds. The Twitter profile appeared in March of 2023 and took the short-selling community by storm. The account is actively talking about many tickers which are potential shorts, but also managed to write up two ideas in more detail. 

The first stock they targeted was Applied Digital (APLD). Guasty thus joined the RILY crew, who are relentlessly pounding the table and alleging the bank is going to eventually fall apart. 

The second one quickly delivered, although the borrow was hard to find. Guasty targeted Aurora Acquisition Corp (AURC), a deSPAC play. The activist wrote about how the track record of the new business is dubious and how the valuation does not make any sense. The stock is now down 96% and collapsed only a few days after the short call. 

Having in mind recent Guasty's announcement, it remains to be seen in which capacity will this handle continue with public shorts:

There were also several newcomers that published one short call in 2023, e.g., Anathema Research, Bird Dog Research and Railroad Ranch Capital.

Last but not least, we would like to briefly highlight Ragnarok Research. This activist was the most prolific of all newcomers in 2023, with five campaigns. While the performance varies, what is peculiar is who Ragnarok apparently is. As per their X/Twitter profile: 

‘…We are just a team of fifteen-year-olds publishing our thoughts on overvalued companies…’

It is good to see that the younger generation is taking up their spot in the activist arena and that there are so many new accounts in the community. 

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* Note: Presented data and analytics is as of available on 2023-12-29, UTC 12:00.

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