Forbes published a very well-written in-depth piece on $SOFI today. It's rare that we (MW) have so much skeptical company on the sell-side on a given name. The irony here is that on the long side, it's like a religion.

Keep an eye out!

Finally got around to the @AcquiredFM episode on Vanguard this week. I know I am late to the party on this one, but it was worth it. It also connected a few dots for me on something Carson Block at @muddywatersre has been beating the drum on for a while now, which is passive investing. Quick history. Jack Bogle launched the first index fund for regular people back in 1976, basically to stop Wall Street from charging high fees for average returns. Brilliant idea, and it absolutely worked. Passive now owns more of the US market than active does, and the big index funds are the largest shareholders in most American companies. Here is where Carson's point comes in, and once you see it you cannot unsee it. Index funds buy based on size, not value. Every month money pours in from 401ks and retirement accounts and gets spread across the biggest names no matter what they cost. Companies lean into it with buybacks. So the largest stocks keep getting bigger, and price keeps drifting away from anything resembling fundamentals. The catch is what happens in reverse. The day those flows slow down, through layoffs or retirees finally pulling money out, there is almost no active money left to step in and buy the dip. What used to take a year to unwind could happen in weeks. Bogle fixed the fee problem. Nobody has fixed the question Carson keeps raising: what is a price even worth when most of the market owns it without ever asking. That is the part of the market we find most interesting.

On this day in Short History: June 15, 2021, @HindenburgRes drops its $DKNG report. Day one, down 4.2% and gapped down 11% at the open. Five years on, 28.79, about 36% under that open. Some shorts win on day one and again on day 1,800.

Thanks @UpslopeCapital for posting this one, made for good reading with my coffee this morning. And @CodfishJohnny always love a good/bad company reaction as well. The paper basically proves the hunch. Companies that come out swinging at short sellers, suing them, calling for SEC probes, screaming conspiracy, go on to trail the market by about 2.3% a month for the next year. The kicker is the screeching alone predicted it about as well as the actual lawsuits did. You don't even need them to sue. The tantrum seems to be big tell as well. And the loudest ones were usually the real story. Solv-Ex sued a short seller and turned out to be the fraud. Fuld swore he would hurt the shorts in 2008 and Lehman was a zero by September. Funny part is the author still won't say go short them, because the same companies fighting the borrow make the trade a pain to hold. Being right and being able to stay short are two different things.

Not claiming to know everything about this but didn’t someone already try a market for electricity, if my memory serves me right it didn’t end well

Two short reports on $ENSG in one week. @hntrbrkmedia on 6/8, @muddywatersre on 6/11. The stock is down 13% from the June 8 open and 3% from the June 11 open. One of our analysts came to Activ8 from the healthcare investing side, so we had him put the two reports side by side. Different firms, different data, but they kept landing in the same places. Here's where they overlap: Staffing. Muddy Waters has Ensign at 3.7 nurse hours per resident day vs 3.9 national average (PACS also 3.9). Hunterbrook ran an acuity-based sufficiency model and found a 5M hour shortfall vs what Ensign's own reported acuity requires, and that's July to November 2024 alone. Acuity cuts the wrong way. Ensign's skilled mix runs above PACS (30.7% vs 28.7% per the 10-Ks). Sicker patients should mean more nursing hours, not fewer. Both reports make this point independently. Comp structure. Administrators take 10-15% of facility EBIT plus a cluster pool per MW's interviews. Hunterbrook cites a deposition where one administrator's bonus went from ~$400K to $800K while staffing below recommended levels. The incentive to cut nursing labor is direct, not incidental. Therapy billing. Both surface former employees describing minutes billed but not delivered. Ensign paid $48M in 2013 to settle the same category of allegations. MW states its work independently corroborates Hunterbrook's findings here. And 69% of revenue is Medicare/Medicaid (Q1 2026 10-Q, per MW), which is why this is a False Claims Act conversation and not just an operating one. Ensign didn't respond to any of Hunterbrook's requests for comment, and nothing public on the Muddy Waters report yet either.

Just finished re-reading Money Men, so the Wirecard story is fresh in my mind. What's amazing is that six years after the collapse, this story still will not die. The fraud trial in Munich may now run into 2027. Per new reporting from BR24 (German outlet, I translated the piece), a former Wirecard employee just testified in handcuffs because he is jailed in a separate probe, "Operation Chargeback." That probe alleges criminal networks used stolen card data from 4.3M cardholders to create 18M fake porn and dating subscriptions, with German payment firms processing 300M euros in illicit transactions. Fugitive Wirecard exec Jan Marsalek sits at the center of both scandals. Wirecard was never an isolated fraud. It was the most visible node in a much larger network. Activist Short Sellers warned for years before anyone listened. br.de/nachrichten/wirtschaft…

Abaxx - Not Even Worth A Crumb Viceroy is short Abaxx $ABXX. The Exchange is comprised of wash-traded churn sustained by incentives, which collapses the moment incentives are switched off. There is limited genuine hedging activity or price discovery supporting this façade. 1/

We have 26 solar cell invoices to $TE from Trina Solar that prove T1's management has been misleading investors The invoices show ~$65 million of solar cells were bought from Trina in Q1 alone

New @WhiteResearch report on $SEGG

Agreed! For those who have not read @BenFoldy check out his work!

Which company will have a short report written against them first?

New @hntrbrkmedia short report on $ENSG

On this month's Behind the Bear, we sat down with @JackPatrick06 of @Pelicanwayre. How he finds his targets, why he tries to kill his own thesis before publishing, and how he thinks a short report should really be measured. Full profile: activ8insights.com/behind-th…