Target of Kerrisdale $100M Single-Stock Short Fund Said to be DISH Network

May 5 2016 | 10:06pm ET

The target of long/short equity manager Kerrisdale Capital’s $100 million single-stock short fund has been revealed direct broadcast company DISH Network.

Shares of DISH will drop because the company’s wireless spectrum is overvalued, according to a Reuters article citing sources familiar with the matter. In late April, it was reported that Kerrisdale had raised roughly $100 million to bet against the shares of an unnamed public company. “We raised a meaningful amount of capital (in) a very short timeframe, so clearly we struck a chord within the alternatives community," said Kerrisdale Capital founder and former Longacre analyst Sahm Adrangi at the time. 

Kerrisdale reportedly declined to comment on Thursday, said Reuters, and investors were not officially told the name of the company. The alternative money manager tweeted on Thursday that the capitalization of its target was more than $10 billion and that it thinks the true value is 60% to 80% percent under its current price. Kerrisdale, which said in late April that it was preparing materials, including a report, video and website to convince others of its thesis, also posted that it was still weeks away from publication. 

For its part, DISH, which is a quiet period due to an upcoming FCC airwave auction, was quoted in a Bloomberg article as saying “We understand Kerrisdale is shopping a negative report on Dish and may be shorting our stock in an attempt to make a short-term gain. We will continue to manage the business for the long-term benefit of our shareholders as we have done over the last 35 years.” 

New York-based Kerrisdale is a long/short equity manger with assets of around $500 million, including the capital raised for the co-investment fund, deployed into value and special situations investments. The firm has conducted so-called “activist short” campaigns in the past, betting against a stock and then bringing its reasoning public. The fund gained attention in 2014, when it booked a gain of 180%, and again last year with a 17% gain during a year when most hedge funds lost money. The company’s main fund is down around 7% so far in 2016, however, according to Reuters. 

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