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Andrew Freedman Quoted in The Deal on How Equity Activists Kill Short Sellers

August 20, 2018

Andrew Freedman, Co-Head of Olshan’s Activist & Equity Investment Group, was quoted in The Deal (subscription required) regarding recent publicly-traded companies that are coming under attack by activists and are experiencing very heavy short-selling interest among targeting by short-selling campaigns.  This was the case with Rent-A-Center Inc. (RCII) and its sale which led to the buyout of Vintage Capital at $1.37 billion.  Rent-A-Center Inc. (RCII) is one of many other companies that have had to deal with heavy short selling. Mr. Freedman stated that, “The shorts these days are in a sense betting, or at least hoping, that an activist, like Engaged, doesn’t show up…. Short sellers and activists do similar diligence on any underperforming company, it’s just that the activist investor makes the bet that it can turn the ship around through engagement and push for certain changes, while the short seller typically thinks and makes the case that there’s something even more broken or fundamentally problematic that even one of the leading activists and their new board members and consultants can’t fix.” There are also cases of corporations dealing with short-selling campaigns and later equity insurgencies.  This then leads to a company being heavily shorted and then being forced to buy back shares on the open market at prices that are at a loss to them.  Mr. Freedman noted that, “Takeovers pretty much blow up the short positions.“


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