Short Selling Beyond Traditional Frauds

Short sellers often go after the worst of the worst, looking for companies and management teams with serious and potentially even criminal issues. This is leaving a massive opportunity set of poorly run but not fraudulent companies untouched by activist short-sellers. Chris Drose, the founder of Bleeker Street Research, explains why he is expanding beyond the traditional targets of activist short selling. He argues that most stocks are dead money over time and because of this there is a massive opportunity in short selling that is going underappreciated. Drose explains why he thinks these companies are susceptible to short activist campaigns, the benefits of publishing research on these non-traditional targets, and the ways this type of activist campaign should differ from targeting an outright fraud.