Hedge Funds: "Loeb Boosts Short Bets Citing Sloppy Accounting, Volatility"
From Bloomberg:
Billionaire hedge fund manager Dan Loeb said he’s building bets
against stocks that surged because companies are relying too much on
dubious financial metrics.
“There’s been some real sloppiness in
accounting, and this move toward using adjusted Ebitda and adjusted
earnings has produced some companies that I think are trading on
valuations that are not supported by the real numbers,” Loeb said
Wednesday in a conference call held by Third Point Reinsurance Ltd.,
referring to earnings before interest, taxes, depreciation and
amortization. “We’ve seen some real themes that favor the type of short
selling that we do.”
Loeb, who oversees investments for the
insurer, said there are several shifts in recent months that make
shorting more attractive. He cited increased volatility, a more tempered
economic outlook and a rally that may have lost momentum.
“It’s a lot easier for us to find shorts and not get overcome by a rising market tide that could lift all stocks,” he said.
Loeb
said he now has more short wagers against individual companies than
long ones. He didn’t name securities that he expects to fall, but said
“there are certain industries that we see that are deteriorating where
we have made some bets.”...MORE