Originally posted December 14, 2022. Short-selling hedge funds are celebrating 2022 as falling stocks, tight money, and an energy crisis create prime opportunities for them. Laurence Fletcher reports for the Financial Times: “Recently we’ve been getting more absolute return from the short book,” said Chris Crawford, who runs a long-short hedge fund for Eric Sturdza Investments. “The reality is setting in for these companies,” he said, referring to unprofitable groups that investors rushed into during the bull market. Higher interest rates have ratcheted up the pressure on firms whose … [Read more...]

  Bloomberg's Bob Van Voris reports that meme stock gurus Edward Constantinescu and Perry Matlock have been indicted, along with six others involved in what prosecutors call a pump-and-dump scheme. Van Voris writes: Social media influencer @MrZackMorris and several others active in last year’s meme-stock frenzy were charged by federal prosecutors with engaging in a $144 million “pump and dump” scheme. Edward Constantinescu, known on Twitter as “@MrZackMorris,” and Perry Matlock, whose Twitter handle is “@PJ_Matlock,” were among the defendants charged in an indictment unsealed … [Read more...]

Originally posted January 23, 2018. Value investing is dead, or so one might have assumed based on the relative performance of value portfolios during the current bull market. Value investors have been fighting a losing battle over the last decade. The chart below compares the difference in the performance of value stocks, as measured by the Russell 1000 Value Index and the Dividend Achievers Index to growth stocks as measured by the Russell 1000 Growth index. Each line on the chart represents the difference in the 5-year compounded annual growth rate of the value index and the growth … [Read more...]

Stock buybacks have fallen short of expectations in 2022. At The Wall Street Journal, Spencer Jakab explains what happened, writing: Washington hates stock buybacks as much as Wall Street loves them. This was supposed to be not just a record year for American companies’ favorite way of rewarding shareholders but also one when a big, gaudy number—a middle finger of sorts to sanctimonious politicians—was supposed to be reached. Buybacks for companies in the S&P 500 were predicted by Goldman Sachs and others to cross the $1 trillion threshold. After they got off to a raucous start, … [Read more...]

Markets in Hong Kong were hit when the latest Chinese Communist party congress left great uncertainty surrounding the future of business in the city. Hudson Locket and William Langley report for the Financial Times: Shares in Hong Kong dropped to their lowest level since the end of the global financial crisis as investors reacted to the city’s economic recovery plans and the 20th Chinese Communist party congress in Beijing, where President Xi Jinping is expected to secure a third term. The benchmark Hang Seng index fell as much as 3 per cent to its lowest level since May 2009, while the … [Read more...]

The companies that have come public over the last year are suffering so badly in comparison to the broader market, that they are scaring other companies away from an IPO. Corrie Driebusch reports for The Wall Street Journal: Recently public companies are among the worst performers in this year’s stock-market rout, contributing to a deep freeze in the IPO market that shows few signs of thawing. Roughly 87% of companies that went public in the U.S. last year are trading below their offering prices, down more than 49% on average as of Friday’s close, according to Dealogic. By rough … [Read more...]