Wayfair: Not Scared Of Short Sellers

The CEO of home good eCommerce up-and-comer is shrugging off the recent machinations of short-sellers that have made the company their new favorite target.

Niraj Shah says that despite their interest, the reality is short sellers have less than a wholly prescient track record.

“Mr. Tilson was well known for shorting Tesla, Netflix  and Google — they’ve all continued on to great success,” Shah said, referring to Whitney Tilson, founder of Kase Capital Management and famed short seller, who has been on a recent mission against Wayfair’s stock price.

And Tilson himself admits he is not infallible. In an interview in June he noted that shorting Tesla was “one of the biggest mistakes long or short of my investment career.”

But Tilson is also not alone in his concerns about Wayfair; shorted shares represent 55.3 percent of its float, making it the second most shorted company on the NYSE. Despite that fact, however, Wayfair’s shares are trading up 143.7 percent this year, due in part to a “true Black Friday” on the firm’s part — which very much knocked the company into the black.

“I have never questioned Wayfair’s ability to grow its revenue rapidly — at least for now,” Tilson wrote in an email to Real Money earlier this month. “What I question is the company’s ability to ever earn a meaningful profit.”

“Anyone is welcome to buy our stock, anyone is welcome to sell our stock,” Shah said. “I think high-growth companies are often misunderstood.”


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