Activist Short-Selling: Uncovering Fraud and the Future

Published on
February 26th, 2020
Duration
45 minutes

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5

Activist Short-Selling: Uncovering Fraud and the Future

The Expert View ·
Featuring Carson Block

Published on: February 26th, 2020 • Duration: 45 minutes

Carson Block, CIO of Muddy Waters Capital – an activist short-selling fund, joins Real Vision again to discuss activist short-selling and how he found his way into this niche corner of the financial markets. Block addresses criticisms of short-selling in general, dispels widely held misconceptions about activist shorts, and reveals how he goes about targeting companies to place short bets on. Block shares a few anecdotes from companies he has shorted in the past and reveals his thoughts about what the future of the short-selling industry might be. Block also outlines his thoughts on Tesla, non-GAAP accounting, and why he employs behavioral analysts when executives of companies respond to Muddy Waters' reports. Filmed on February 11, 2020 in New York.

Comments

Transcript

  • BS
    Bill S.
    26 February 2020 @ 17:44
    21 2
    Not on point but the product shift demands a response How many purchased a product prior to today and are feeling unfairly treated by the 5/wk video limit that didn't exist until today? How many feel they should be grandfathered until their subscription runs out and then make the decision to continue at the lower (actually increased by 50+) or accept the "upsell" at 3x the price??
    • AK
      Arthur K.
      26 February 2020 @ 22:49
      4 0
      Yeah, thought about that. Extended my former Access subscription by a year and curtailed TV subscription. Maybe your idea too complex? Seems fair enough but you have a valid point.
    • PP
      Patrick P.
      27 February 2020 @ 04:32
      9 1
      I agree on the product shift... the second that I feel like I've been taken for a ride I'm out of here. I have enjoyed RV, but it seems like they are a blind man in a forest. They keep bouncing around as if they're lost. They started out with a good idea and product and then it started to come apart. As an example whatever happened to Grant Williams? Have you noticed the second and third tier experts? (not to say that they are not interesting) I think that Real Vision is in a decline and all these changes are indicative...... we will see.
    • DS
      David S.
      27 February 2020 @ 17:42
      2 0
      Five videos per week was about maximum, sometimes three in the past. RVTV has come through in the past, so it is reasonable that they will continue to deliver. I upgraded to try the new system. It is not much more than I paid for the regular RVTV subscription when I started. I will see if the new system is worth it to me on a money back basis. I do not trade often. If the new levels are mostly for real traders, then I will go back to the first level. If the new levels really help investors who want to trade, they certainly would be worth it. Since RVTV is mostly a window on the world for me, I will see if the upgrade is worth the difference and decide at the end of the month trail. RVTV subscribers are a pretty smart group, they will figure it out. DLS
    • SB
      Stewart B.
      2 March 2020 @ 22:02
      2 0
      Yes. I feel as though I have been kicked to the curb by Real Vision, especially as I've tried to promote them, and their guests, online every chance I got. They should have moved legacy members to Plus, not Essential.
  • fT
    forecast T.
    2 March 2020 @ 02:44
    1 0
    Describes an experience I am facing very well. I have a suspicion some toxic company has aspirations to go public.
  • JK
    Jay K.
    26 February 2020 @ 22:14
    0 21
    Activist Short-Sellers are frauds and charlatans.
    • NA
      N A.
      27 February 2020 @ 08:58
      11 1
      *Activist Short-Sellers expose frauds and charlatans.
    • TR
      Travis R.
      1 March 2020 @ 12:28
      0 0
      Agreed. Some but not all. There are most definitely quite a few bad actors in the short selling world.
  • FM
    Florian M.
    27 February 2020 @ 12:02
    1 0
    Quote: "There are two fairly recent examples that come to mind but I'll stick with one since that's what I was asked for." You get what you pay for.
  • NA
    N A.
    27 February 2020 @ 08:55
    8 0
    Thanks for the interview. Big of him to volunteer one of their worst trades as an example without being asked. In conjunction with that, next time would like to know when he decides to close his trades? Whether they work or not. Especially due to the asymmetric payoff profile of shorting.
  • AP
    Adam P.
    27 February 2020 @ 01:44
    5 0
    Did you ever get concerned about your physical well-being? Seems like this could be hazardous to one's health...
  • DS
    David S.
    26 February 2020 @ 21:16
    6 0
    Since any short seller must identify the value of a stock to short, they may be the only ones actually trying to value a stocks in this market filled with passive investors. DLS
    • JH
      Jesse H.
      26 February 2020 @ 23:31
      0 0
      Great point.
  • M.
    Milton .. | Founder
    26 February 2020 @ 09:53
    2 0
    The ads issue is getting fixed right now so I cleaned the comment section. We are currently updating everything in the backend so you might see some inconsistencies but everything will be back to 100% asap. Until then, please enjoy the roof of Real Vision as everything is in one place now. Milton
    • DS
      David S.
      26 February 2020 @ 21:13
      1 0
      There are always problems going with a new and better system. From past experience I know that you will fairly fix the issues quickly. Best of luck with the new system. DLS
  • T
    Thomas .
    26 February 2020 @ 18:58
    0 0
    Very interesting interview. Tells me not to short stocks because I can’t compete with Mr. Block.
  • MV
    Maxime V.
    26 February 2020 @ 13:51
    0 2
    There is no governor in Saskatchewan...
    • MR
      Maxi R.
      26 February 2020 @ 15:41
      5 0
      You're right. It's a Lieutenant Governor, sorry for the semantic blockage, how could you possibly have understood what he meant?????
  • SK
    Sergejs K.
    26 February 2020 @ 12:39
    1 5
    Not a lot of value.
  • HK
    H K.
    26 February 2020 @ 10:43
    1 0
    was nice to hear, but not sure there was much to take away

Chapters

  1. 00:01:41
    How did you become an activist short-seller?
  2. 00:04:59
    What was your experience with Rent-Way and how did that impact your career?
  3. 00:06:32
    What's the difference between traditional short-selling and activist short-selling?
  4. 00:08:52
    Talk about your experience with Manulife
  5. 00:12:22
    What happens after you publish a report?
  6. 00:14:59
    Why did you start using behavioral analysts to break down the responses to your reports?
  7. 00:17:52
    How to address criticisms about activist short-selling
  8. 00:19:44
    What's the impact of political attitudes about activist short-selling?
  9. 00:24:44
    Where do megacaps fall into your process?
  10. 00:27:38
    What is your view on Tesla?
  11. 00:29:55
    What kind of company do you look to short?
  12. 00:34:27
    How do you screen for companies that you short?
  13. 00:36:54
    Has the rise of non-GAAP accounting made it harder to identify short targets?
  14. 00:37:57
    What are some red flags you pay attention to?
  15. 00:39:05
    What do you see for the future of activist short-selling?