Large Short Sellers in the Area? Activist Campaigns Are More Likely to Succeed.
When a stock attracts more large short sellers, an activist hedge fund’s campaign has a higher chance of success. Additionally, the likelihood of activist success is even higher when investors are in disagreement. Short sellers and activists tend to “agree to disagree by targeting the same company” and disagreement often stems from differences of opinion and the presence of “unsophisticated” or inexperienced investors. “It really depends on the point of view,” said researcher Pedro Saffi of the University of Cambridge in a phone call. “Activists look at the glass half full an...
Source: institutionalinvestor.com