Alfred Little and Gotham City Research lead inaugural short-seller rankings

Study shows following short-sellers produces 12.5 percentage points of alpha

By Adam Kommel, President

New York - August 5, 2014

Today, Activist Shorts Research released the first ranking of activist short-sellers, comparing 28 top short-sellers by their average campaign-length return and average one-week return. We also find that a simple strategy of following activist short-seller campaigns since 1-1-2013, with a one-week lag, produced alpha of 12.5 percentage points.

All-time ranking

Alfred Little took the top spot for average campaign-length return, with its 15 targeted companies seeing an average return of -63% from campaign announcement to end date (usually defined as one year from last short-seller comment). Gotham City Research had the best one-week return average, with its five targeted companies seeing an average return of -31% in the week following campaign announcement.

Pershing Square was the top registered investment adviser in the campaign-length return ranking, with a -43% return to its eight targeted companies. The other six RIA's represented are Bronte Capital, Greenlight Capital, Kerrisdale Capital, Kynikos Associates, Lakewood Capital and Whitney Tilson (of Kase Capital and T2 Partners).

The full chart as of the 8-4-2014 close is available below, and subscribers can view a daily-updated table at Since returns are from the company's perspective here, a negative return is good for the short-seller.

Post-2013 ranking

To generate more actionable rankings, we re-ran the rankings to include only campaigns announced since 1-1-2013, and we excluded campaigns at stocks trading primarily over the counter (as those are significantly more difficult to short). Only short-sellers with at least three matching campaigns are included in the below table, so some of the short-sellers in the above table are excluded.

The resulting rankings give runaway victories to Gotham City Research on both campaign-length and one-week returns. Among RIA's, Kerrisdale Capital and Whitney Tilson led with -9% and -7% campaign-length returns, despite a rising market. Famed short-seller Kynikos Associates actually saw a +5% return for its eight campaigns, despite a -4% average one-week return.

Follower returns

We can take this study one step further, though, and calculate the alpha generated by following short-sellers by shorting targeted stocks one week after campaign announcement and holding through the close of the campaign ("follower return"). Our results show that following short-seller campaigns since 1-1-2013 has produced returns of 1.1% to the short-seller and alpha of 12.5% compared to the average S&P 500 return during the same period. Thus, it appears that despite a historically difficult period for short-sellers, activist short-sellers have nevertheless seen much success.

Clients may request the Excel data underlying this report by emailing the author at To request a 30-day trial, email


The "all-time" ranking includes all campaigns by short-sellers with at least one campaign that was active within the last 12 months. The short-seller must also have at least three campaigns in the database (any time period). Full history is not tracked for Richard Pearson, Street Sweeper, Citron Research, Kynikos Associates, Whitney Tilson, Bronte Capital and Matt Berry.

The post-2013 table includes only campaigns announced since 1-1-2013 and excludes OTC listings. We used 1-1-2013 because it is the date our full coverage of all activist short-seller campaigns begins; the study would be subject to selection bias if we used a longer time frame.

The follower returns data includes campaigns announced between 1-1-2013 and 7-27-2014, and it excludes OTC listings. We also made a few other small modifications to this dataset to account for halted stocks; for more information, please request the underlying Excel data. The average length of campaigns included in the follower returns data set was 240 days, as the majority of included campaigns are still open.

Returns are total return figures with dividends re-invested at ex-dividend date. Borrow costs are not factored into returns.