Extreme Tech Shorts

I am a manager of a tech stock hedge fund. In the current environment, I see opportunities for extremely overvalued, fundamentally flawed tech stocks to be shorted. I aim for the very worst stocks with as large a market cap as possible that should theoretically go to zero.

The biggest challenges are locating shares, avoiding buy-ins, dealing with excessive margin maintenance requirements on sub $2.50 per share stocks, and obtaining reasonable borrow rates for an extended time period.

In spite of these challenges, the strategy has worked quite well on an absolute basis since last year, despite the rising stock market.

From time to time, I will post a short research note on these overvalued shorts. I will also disclose if my fund has a position in these companies when posted.

I would welcome any comments from peers or other investors who would like to learn more about shorting tech stocks.


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