Platinum Asset Management: The End (from us)
We always knew that disclosing shorts would be more controversial, given how few funds do it, but our Platinum Asset Management story escalated even quicker than we thought it would.
In our last blog, we mentioned at the very end that we had reduced the position. The last three weeks is evidence why actively managing a short position is so important. The large rally in the stock enabled us to short more at better prices, thus locking in higher profits.
What happened since the AFR's article about our short position in Platinum Asset Management?
Platinum Asset Management (PTM) announced last week that they were going to buy back up to 10% of their stock in the next 12 months “..if the PTM share price trades at a significant discount to its underlying value” and which can only be construed as a response to the growing short interest.
What was interesting to us was that they used this as a response. We blogged about our short position in Woolworths and, like PTM, there was a substantial short base in the stock. However, Woolworths took a different approach to the high level of short interest: they set about trying to fix their business. Because ultimately the best way to force a short to close their position is to invalidate their thesis.
Will the buyback make a difference?