The World According to a Free-Range Short Seller With Nothing to Lose
Marc Cohodes, the scourge of Wall Street, is back. And he’s passing along his “dying art” to a new generation of troublemakers.
The roosters start crowing at 4 a.m. on Alder Lane Farm, about an hour north of San Francisco on the edge of Sonoma wine country. While horses stir in their stables and chickens begin to roam the 20-acre property, one of the world’s most fearsome short sellers puts on his usual attire—shorts and flip-flops—and makes his way in the dark to the room behind his garage. Six pinball machines, a gigantic flatscreen, and a pingpong table compete for attention. If not for the Bloomberg terminal in the corner, you might assume this was your typical man cave.
But let’s not dwell on Marc Cohodes’s pastured chickens, or his show-jumping horses, or even his homemade apricot jam that, on special occasions, San Francisco’s Una Pizza Napoletana puts on its pies in lieu of tomato sauce. Some of the most respected people in the investing industry say that, dating back to the 1980s, nobody has had a better nose for sniffing out fraud than the 56-year-old Cohodes. He’s exposed suspect accounting at a number of high-profile companies, including the Belgian speech-recognition software developer Lernout & Hauspie, which went bankrupt in 2001 after being valued at about $10 billion, and mortgage lender NovaStar Financial, where his efforts earned him a Harvard Business School case study published in 2013.