Looks like Steve Cohen caused Whitney Tilson some pain on his Netflix and OpenTable shorts.In some circumstances, multi-billion hedge fund managers might squeeze a short just because they can, and Tilson’s ~$200 million T2 Partners is relatively tiny. Cohen’s SAC runs about $12 billion.
excess demand, buying up the stock over time, and forcing the price upward, aka squeezing the short.
And according to a new interview with Cohen (and PTJ) at a recent conference, that’s exactly what he did.
From Dealbook’s coverage of the interview:
[Cohen said that his] favourite sectors are mobility apps and businesses that create faster networks or enable consumers on the Internet, [and he cited] Netflix and OpenTable as examples.
Whether it was on purpose and just for fun after he saw Tilson talk his book, or not — the Cohen trades hurt Tilson’s book.
This is not to say that Cohen targeted just Tilson, because he probably didn’t, but Tilson is a popular investor whose trades many people follow. And it looks like his CNBC call was one of the things that added to Netflix becoming a “crowded short,” and providing other investors a simple reason to buy the dip.
Thus, Tilson recently had to cover his Netflix short, probably largely because of Cohen.