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The most prolific of activist short sellers in 2020 was Nathan Anderson, founder of Hindenburg Research in New York City. He initiated 24 of the 177 campaigns launched around the world, according to data analytics firm Breakout Point.

In Canada, Hindenburg Research was responsible for nearly half of the 16 sell recommendations issued by activist short sellers in 2020.

Activist short sellers borrow and sell the shares of companies, then publish critiques of the companies in research reports, social media and other channels. With the assist of publicity, they hope to buy the shares back at a lower price for a profit.

If you want a peaceful life, don’t take up this line of work. The thirty-something Mr. Anderson regularly gets tweets like this: “Stay off my stock or … meet with a burning building and your employees shot in your office.” When starting out several years ago, he got sued nearly right off the bat, accused of being part of a “wolfpack” of conspirators.

Mr. Anderson and his team were not only the most prolific of activist short sellers in 2020 but also the most proficient. Five of their targeted companies experienced stock declines of more than -65 per cent; this put them on Breakout Point’s list of the 10 most successful short calls.

Activist short sales of Canadian stocks in 2020

Nymox Pharmacentical Corp.NYMX-QWhite DiamondThursday, February 6, 2020$3.73$2.48-33.5%
NexTech AR Solutions Corp.NTAR-CNHindenburg Wednesday, February 10, 2021$2.50$6.70168.0%
Nymox Pharmaceutical Corp.NYMX-QNight MarketThursday, February 20, 2020$3.22$2.48-23.0%
PharmaCielo Ltd.PCLO-XHindenburg Monday, March 2, 2020$1.30$2.0860.0%
Cineplex Inc.CGX-THindenburg Thursday, March 5, 2020$29.86$9.27-69.0%
Silvercorp Metals Inc.SVM-THindenburg Monday, April 20, 2020$4.91$8.5173.3%
New Pacific Metals Corp.NUAG-THindenburg Monday, April 20, 2020$5.81$8.0338.2%
Novagold Resources Inc.NG-TJ CapitalThursday, May 28, 2020$14.65$12.32-15.9%
Facedrive Inc.FD-XHindenberg Thursday, July 23, 2020$14.13$16.2014.6%
Timbercreek Financial Corp.TF-TMarinerTuesday, July 28, 2020$8.47$8.652.1%
GFL Environmental Inc.GLF-NSpruce PointTuesday, August 18, 2020$24.58$37.1151.0%
Northern Dynasty MineralsNAK-AJ Capital Wednesday, September 9, 2020$1.32$0.41-68.9%
Greenpower Motor Co Inc.GP-QMarinerWednesday, September 23, 2020$15.45$37.02139.6%
Loop Industries Inc.LOOP-QHindenburg Tuesday, October 13, 2020$13.50$9.20-31.9%
Electrameccanica Vehicles CorpSOLOCitronFriday, November 20, 2020$10.20$6.19-39.3%
Greenpower Motor Co. Inc.GP-QWhite DiamondTuesday, December 8, 2020$18.55$37.0299.6%

Source: Breakout Point and the Globe and Mail

Hindenburg’s Canadian positions remain open except for Cineplex Inc.. Mr. Anderson was expecting a takeover bid for the cinema chain would be withdrawn and when it came to pass, he closed out his short position after a 50-per-cent decline in the stock.

His Canadian targets appeared to have stood their ground better than his targets in the U.S. and other countries. Most were showing price gains at the end of 2020, delivering mark-to-market losses to Hindenburg. And none of the Canadian bets were among its 5 short calls that appeared on Breakout Point’s list of top 10 short calls. Those 5 were in the U.S. and Hong Kong.

The most expensive stocks to borrow

If a company has few shares available for borrowing, short seller sentiment will be reflected more in the cost to borrow instead of the percentage of shares short. In short (no pun intended), when the cost to borrow a company’s shares becomes high, it can be a signal that short sellers’ bearishness is elevated, even if the percentage of shares is not large.

The 20 most expensive stocks to borrow (as of Jan. 13)

Electrovaya Inc.EFL-T98.8%
Generation Mining Ltd.GENM-T88.3%
Lumina Gold Corp.LUM-T85.9%
Cathedral Energy Services Ltd.CET-T83.6%
Calfrac Well Services Ltd.CFW-T80.9%
Kutcho Copper Corp.KC-T71.7%
Ethos Gold Corp.ECC-T70.3%
Chesswood Group Ltd.CHW-T65.1%
Erdene Resource Development Corp.ERD-T64.6%
Platinum Group Metals Ltd.PTM-T48.1%
Patriot One Technologies Inc.PAT-T42.7%
Bluestone Resources Inc.BSR-T42.3%
Burcon Nutrascience Corp.BU-T39.8%
Field Trip Health Ltd.FTRP-T36.8%
Midas Gold Corp.MAX-T36.5%
Neptune Wellness Solutions Inc.NEPT-T35.9%
IMV Inc.IMV-T35.8%
Just Energy Group Inc.JE-T35.4%
Black Tusk Resources Inc.TUSK-T35.4%
Surge Energy Inc.SGY-T35.0%

Source: Interactive Brokers

Electrovaya Inc. says it is a developer and manufacturer of battery systems for “energy storage, clean electric transportation and other specialized applications.” Its shares have been one of the most expensive to borrow for quite some time, and now they stand at the top of list – with an annualized lending rate of nearly 100 per cent.

Yet, for any Electrovaya short sellers, the squeeze is on: the company’s stock price has risen more than 650 per cent during the past 52 weeks, to now trade above $1.50. After a couple of years in the doldrums, there was a nearly three-fold improvement in revenues to $14.5 million for the fiscal year ending Sept. 30, 2020. This growth was due to “strong demand for the company’s lithium ion batteries from customers in the electric forklift truck market,” reported a company news release.

Is this the start of a long-term uptrend for the stock price? It may well be. However, the price history suggests caution: since 2001, the stock has looked promising several times and traded high, only to fall back to penny status.

Larry MacDonald can be reached at

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