Kerrisdale betting against DISH in newly raised fund: source
By Lawrence Delevingne and Svea Herbst-Bayliss
NEW YORK (Reuters) - Hedge fund Kerrisdale Capital Management has taken a short position in the stock of direct broadcast service provider DISH Network Co, betting that the stock price will fall because its wireless spectrum is overvalued, a source familiar with the matter said on Thursday.
Kerrisdale will short DISH using the approximately $100 million it recently raised in a new fund aimed at shorting a single stock. Kerrisdale declined to comment on Thursday and investors were not officially told the name of the company.
Although the $500 million New York-based firm is relatively small, its presence on social media is large. On Thursday, several Kerrisdale tweets fueled speculation on the new bet.
The firm said on Twitter that it is betting against a more than $10 billion company which it thinks is worth 60 percent to 80 percent less than its current price. Kerrisdale also tweeted "we're still weeks - perhaps many weeks - away from actual publication."
DISH, whose market capitalization is nearly $20 billion, saw its stock price drop 4.24 percent on Thursday to $44.09. It has fallen 13.21 percent in the last five trading days.
"We understand Kerrisdale is shopping a negative report on DISH and has shorted our stock in an attempt to make a short-term gain while DISH is in an FCC-mandated quiet period," a DISH spokesman said.
DISH's largest shareholders include Putnam Investment Management, JP Morgan Asset Management and Eagle Capital Management.
Bloomberg first reported that DISH was Kerrisdale's likely target.
Reuters reported in April that Kerrisdale, run by Sahm Adrangi, raised approximately $100 million from investors to bet against a single stock. The new Kerrisdale "co-investment" fund appears to be the first of its kind.
Hedge fund managers sometimes raise money to focus on a particular investment thesis, such as the recovery of distressed energy companies or residential mortgaged-backed securities.
Adrangi wrote "We've taken a company that's worth north of $10 (billion), and we've endeavored to get everyone to understand the insights we have about it," in a note to investors seen by Reuters.
Some of its recent activist short positions include drug makers Sage Therapeutics Inc and Zafgen Inc, and satellite company Globalstar Inc.
Kerrisdale's main hedge fund, which bets both for and against company stocks, has averaged an annual return of about 28 percent over the last five years, according to the source. The fund is down about 7 percent in 2016 through March.
(Reporting by Lawrence Delevingne and Svea Herbst-Bayliss; Editing by Bernard Orr)
