Latest Spruce Point News

There were plenty of losers in 2022, as stocks plummeted and bond markets broke down in the face of rising interest rates.

The industrial sector rallied almost 14% in October, but short-sellers quickly increased their bets against the sector as prices rose. According to S&P Global Market Intelligence, investors boosted short interest in the sector to 3.08%. However, one well-known short-seller prefers consumer discretionary stocks over industrial names.

Activist short seller Spruce Point Capital Management bested the market downturn last year with a gain of 7.4 percent, according to a yearend letter to investors that Institutional Investor has received.

Despite all the public outcry against short sellers, a number of them survived 2021 just fine. A case in point is Ben Axler’s Spruce Point Capital, whose flagship hedge funds gained 21.4 percent on a net basis, according to a letter to investors.

When Genius Sports Ltd. merged with a blank-check company earlier this year, it became part of the the hottest trend on Wall Street this side of meme stocks.

At least that is the view of Ben Axler, founder and CIO of New York-based Spruce Point Management. And it is a view shared by other committed short sellers. As Jim Chanos recently told the Financial Times, ‘we are in the golden age of fraud’. Case in point: Chanos allegedly pocketed a cool USD100 million (approximately) by shorting German fintech company Wirecard.

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.

A short-seller might have been strained for opportunities during the extended bull market, when stocks climbed upward, often without any hitch.

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After a wretched 2018, hedge funds — and the broader markets — had a much better run last year. In 2019, the Standard & Poor’s 500 stock market index gained a blistering 31 percent — but a handful of hedge fund managers posted even better results. They will be among the winners at Institutional Investor’s 18th annual Hedge Fund Industry Awards.

Ben Axler is used to being alone on his stock calls. In August, the New-York-based short seller released a report criticizing Canadian space tech juggernaut Maxar Technologies Ltd., raising questions about some of its accounting practices and warning that the company’s shares could lose more than half their value.

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Ben Axler’s Spruce Point Capital Management, which focuses solely on short activist plays, is having a bang-up year, rising more than 13 percent through June, according to sources familiar with the fund.

It all started so rosy. The market’s precipitous fall during the first few months of 2016 suggested the time was ripe to launch short-biased hedge funds, whose ranks had diminished in recent years.

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A small short-seller that says its reports have led to the resignation of several CEOs has a new big short.