Consolidation Comes to Activist Short Selling

On Thursday, July 2, paid subscribers to The Bear Cave received an investigation like the 94 that Activ8 has analyzed before it: a public company, a pile of filings, and a thesis that the market had missed something. What was new sat above the headline. For the first time in the newsletter's six-year history, the piece disclosed an active market position: based on the reporting, Hunterbrook Capital was short the stock.^[1]

Four days earlier, Hunterbrook Media had announced it was acquiring The Bear Cave, calling it "one of the most influential investigative newsletters in finance."^[2] The purchase is the first acquisition of its kind in the space in recent memory, and it lands a question on every investigator's desk: is activist short selling, a field of mostly independent shops that collaborate but rarely combine, about to consolidate?

The Deal

Edwin Dorsey announced the sale on June 28. "I started The Bear Cave to pursue independent investigative research and am excited to partner with a team that shares that mission," he wrote, adding that Hunterbrook would invest in bringing more original reporting to the newsletter's readership.^[2]

The asset he sold is one of the most recognizable brands in the space. Founded six years ago in a Stanford dorm room and written by a single author throughout, The Bear Cave has grown to more than 87,000 readers, and Dorsey says its posts have been read over 20 million times.^[2] Readers will continue to receive two paywalled investigations per month, with Hunterbrook's team contributing articles over time; the next investigation is scheduled for July 16.^[3]

The buyer is a different kind of organization. Hunterbrook Media, founded in 2023 and based in New York, is an investigative newsroom that has assembled a full team of journalists, a contrast Dorsey drew himself in describing the fit.^[2] Neither side has disclosed what Hunterbrook paid for The Bear Cave.

Hunterbrook framed the acquisition as a scaling move. "In the golden age of grift and graft, more stories need to be written; wrongdoing needs to be exposed, and digging needs to be done. That's why we're partnering," the company wrote in its announcement.^[2]

A Researcher Joins an Activist Newsroom

The deal does more than change the name on the masthead. At Activ8, we break the broader activist short selling world into two categories under one umbrella term: Investigators. Researchers produce investigative research on a target company but do not necessarily place a bet on the stock's decline. Activists put their money behind the work, taking a position in the company they cover, and that position is clearly disclosed. The distinction matters because it changes how a reader should weigh a report: an Activist has capital at risk behind the thesis, while a Researcher's work stands on the findings alone.

From the Activ8 Guide Library

Different Types of Investigators and Why It Matters

How Activ8 classifies Researchers and Activists, and why the difference should shape how you read every short report.

This acquisition moves The Bear Cave from one of those categories to the other. Under Dorsey, The Bear Cave operated as a Researcher: it published investigative work on public companies without disclosing a directional market position. Hunterbrook runs on a different engine. Hunterbrook Media is affiliated with Hunterbrook Capital LP, an exempt reporting adviser with the SEC, and the two are, in the company's words, "legally separate entities under common control." Hunterbrook Capital's investment activities are one source of funding for the newsroom, and the fund may trade the securities the journalists cover, with any position disclosed at the top of each article.^[4] The disclosure runs in both directions: not every Hunterbrook investigation carries a bet. Its June 2025 investigation into homebuilders D.R. Horton and Lennar, for example, was published as a straight investigative piece, with a disclosure stating that Hunterbrook Capital held no positions related to the article at the time of publication.^[5] That structure now applies to all content in The Bear Cave, whose disclosure page was rewritten on July 1.^[4] Under Activ8's classification, The Bear Cave will accordingly move from a Researcher to an Activist in our database, and its reports will be read, and tracked, in that light going forward.

The first product of the combination arrived on schedule. On July 2, The Bear Cave and Hunterbrook jointly published "Problems at StepStone," an investigation into StepStone Group, the $5 billion private markets asset manager. The report alleges that StepStone faces a buyout obligation tied to its fast-growing retail arm, StepStone Private Wealth, whose managed assets grew from about $3 billion in 2024 to around $18 billion today. Since April 1, an entity controlled by SPW executives, CH Equity Partners LLC, has held the right to force a buyout of profit interests using a formula tied to the unit's paper marks. Hunterbrook estimates that liability at $2.3 billion as of March 31, against roughly $213 million in corporate cash, and argues the company will likely need to issue stock, raise debt, or both to pay it.^[6][7]

The top of The Bear Cave's July 2 StepStone investigation: the first published in collaboration with Hunterbrook Media, and the first to carry a position disclosure, noting that Hunterbrook Capital is short STEP.^[1]

StepStone pushed back in a detailed statement to Hunterbrook, calling the report's valuation math "fundamentally flawed." The company says the buyout is structured at a discount to StepStone's own trading multiple, that the retail fund's marks are set under fund valuation policies reviewed by external auditors, an independent board of trustees, and a third-party valuation agent, and that it will be able to meet the cash requirements of any settlement.^[6] Shares of StepStone fell 1.45% to $40.07 on the day of publication, trading near their 52-week low of $38.85, according to Benzinga.^[7]

The Track Records, by the Numbers

Activ8 Insights tracks stock performance following every activist short and investigative report in its database. To size up what Hunterbrook actually bought, and what it brings, we analyzed the 123 reports with usable price data across the two publishers: 94 Bear Cave reports published between June 11, 2020 and May 21, 2026 (one additional July 2024 report is excluded for missing price data), and 29 Hunterbrook reports published between April 2, 2024 and June 8, 2026. All figures are measured from the report date using split- and dividend-adjusted prices through June 29, 2026.^[8]

One thing to be clear about before the numbers: the percentages in this section are not investment returns, Activ8's or anyone else's. They are stock price movements following a report's publication. A figure of negative 10% means the targeted stock's price fell 10% over that window after the report came out; it does not mean any investor, including the publisher, earned that amount, and it implies nothing about positions held.

The Bear Cave's numbers describe a durable record. Of the 94 targets analyzed, 65, or 69.1%, were trading lower five trading days after publication, with a median five-day move of negative 3.3%. The longer horizon is more striking: the median target now sits 27.2% below its report-date price, 48 of 94 targets (51.1%) are down 25% or more, 31 (33.0%) are down 50% or more, and 14 companies have been delisted entirely. Because a handful of targets went on to enormous rallies, including one micro-cap that rose more than 2,400% after coverage, we report medians rather than averages in the figures above. Figure 3 below shows what those rallies do to the averages, and what the records look like without them.^[8]

The pattern in Figure 1 is consistency rather than fireworks. In six of seven calendar years the median Bear Cave target was lower five days after publication, with the deepest median declines in 2021 (negative 7.7% across 18 reports) and 2022 (negative 6.1% across 19 reports). The newsletter's cadence is equally regular: 93.7% of the Bear Cave reports Activ8 tracks were published on a Thursday.^[8]

Hunterbrook's record is shorter and reads differently. Across all 29 reports, only 48.3% of targets were lower after five trading days, and the median five-day move was positive 1.3%, dragged upward early on by targets like VinFast, which rose 97.5% in the five sessions after Hunterbrook's May 2024 report. But the picture changes with time and with vintage. Measured from report date to the latest close, 62.1% of Hunterbrook's targets are in decline, a higher share than The Bear Cave's 59.6%, and four of its 29 targets have been delisted. The 2026 vintage is the firm's sharpest: six of seven targets were lower after five days, with a median five-day move of negative 11.0%, led by Richtech Robotics at negative 25.9%.^[8] One caveat applies to reading Hunterbrook's numbers as a trading record: the 29 reports include investigations published with no position at all. Its homebuilders investigation into D.R. Horton and Lennar, both of which appear in Figure 2, disclosed that Hunterbrook Capital held no positions related to the article, so those entries measure the market reaction to journalism rather than the outcome of a short bet.^[5]

Averages tell a different story than medians, and the gap is the work of five stocks. Across all 123 reports, five targets at some point rose more than 500% against the published thesis: QMMM Holdings (up 2,414% at its peak measured horizon), Enova International (up 987%) and Palantir (up 681%) for The Bear Cave, and TeraWulf (up 810%) and Safe & Green Development (up 795%) for Hunterbrook. Figure 3 plots the average price move of each publisher's targets across every horizon Activ8 measures, with those five excluded by default; the toggle adds them back. Three reports out of 94 are enough to swing The Bear Cave's one-month through six-month averages from negative to strongly positive, and two reports out of 29 carry nearly all of Hunterbrook's three-month average.^[8]

The Consolidation Question

The acquisition arrives in a field still reshaped by subtraction. Hindenburg Research, the most prominent activist firm of the last decade, closed its doors in January 2025, and no single successor has filled the space it left.^[9] Against that backdrop, Activ8 reached out to organizations across the activist short selling space for their read on where the field goes from here. The sentiment that came back: outright consolidation is plausible, and increased collaboration is all but certain.

David Capablanca, founder of Fugazi Research, whose firm published a joint investigation with Shortfinder on FreeCast, Inc. (NASDAQ: CAST) on June 29, told Activ8 he expects "more potential collaborations in the future in the coming years," and grounded the case in something no database provides: lived memory.^[10] He recalled that in a recent collaborative report, he recognized the target company from a prior incarnation years earlier, tracing it from memory back to a stock promotion network tied to Jonathan Lebed, the trader the SEC pursued as a teenager for pumping stocks through online message boards. That thread, he said, is not the kind you pull from a search bar. "Memory is everything," he said; a model is "not going to go as deep as the human being with the experience."^[10]

That is Capablanca on what pooling resources actually buys, beyond the obvious splitting of costs and workload: "shared experiences, different perspectives, different backgrounds." Activism, he added, has to be personally driven, and "when you're driven by it, you can be more creative, and you can dive deep into your memory, your self, your human experience as a resource."^[10]

The recent tape supports him. The FreeCast report was a two-firm effort. The StepStone report was a newsroom-and-newsletter effort. Two of the highest-profile short-side investigations of the past two weeks were, in other words, collaborations, published within three days of each other.^[11]

From the last report published by Shortfinder: the FreeCast, Inc. (NASDAQ: CAST) report box from "Starlink Hype Meets Fraud Trail," written in collaboration with Fugazi Research and published June 29, 2026.^[11]

The Founder of Shortfinder, who co-authored that FreeCast investigation, drew a sharper line for Activ8 between the two kinds of assets in the space, and it runs straight through this deal. "I don't expect much consolidation among traditional activist short seller firms," he said. "Their [activist short seller] business model relies heavily on trading, and most of the value resides with highly skilled individuals rather than with the firms themselves. A potential acquirer is more likely to poach talent than acquire an entire firm."^[12]

Newsletters, in his view, are the exception that makes a deal like this one work. "A newsletter's value lies not only with the writer but also with its lists, subscriber relationships, and brand," he said. Given how many newsletters have launched over the past decade, "we could see some consolidation among the top names, but the deals will likely be few and selective. Activist short selling remains a specialized niche."^[12]

On pooling resources, his answer echoed Capablanca from the other side of their own collaboration: "Pooling resources can succeed when two or more short sellers are researching the same stock at the same time and their skills are complementary. They can produce a comprehensive report and increase distribution for everyone." He also pointed to a quieter arrangement spreading through the space: "Collaboration between independent researchers and larger hedge funds is increasingly common. A researcher may provide certain research exclusively to a fund, which will finance an activist campaign and share profits with the researcher."^[12] The arrangement is commonly referred to in the space as working with a balance sheet partner: the fund supplies the capital and takes the position, the researcher supplies the thesis, and the two split the outcome. That structure is, in loose form, a cousin of Hunterbrook's own model, where an affiliated fund finances the journalism and trades on it.

Seen through that lens, the Hunterbrook deal looks less like the start of a wave than a template with narrow application. What changed hands was precisely the newsletter asset the Founder of Shortfinder describes: an 87,000-reader list, subscriber relationships built over six years, and a brand, none of which walks out the door the way a star analyst can. It is possible that full mergers remain the exception, reserved for the handful of publications where those assets exist, while the more common pattern over the next few years looks like the FreeCast report: named firms pooling documents, sources, and memory on a single target, each keeping its own shingle. Where acquisitions do happen, the buyer will probably resemble this one, an organization with a funding model that can support a newsroom.

Distribution may also run in the other direction. Among the investigators Activ8 analyzed, Hunterbrook Media has the largest Instagram and TikTok presence, with 5,287 followers on Instagram and 4,866 on TikTok as of this writing, and its short-form content is well produced and professional.^[13] The Bear Cave, by contrast, grew primarily through X. Those Instagram and TikTok counts are small next to either brand's X following, but Hunterbrook is active on the platforms where a newer generation of investors increasingly gets its financial information, and few investigators have any footing there at all. Even if it factored only marginally into the deal, it is reasonable to expect The Bear Cave's reporting to be introduced to those channels.

What Comes Next

The Bear Cave's next paid investigation is scheduled for Thursday, July 16, its second under Hunterbrook ownership.^[3] It will look like the ones before it: a Thursday, a company, a thesis. The line above the headline is what has changed, and the market will now read each report knowing a fund stands behind it. Dorsey, for his part, framed the outcome in the terms the field measures itself by: the partnership, he wrote, will be "a loss for bad actors wherever they may hide."^[2]

Sources

1. Edwin Dorsey (with Hunterbrook Media), "Problems at StepStone ($STEP)," The Bear Cave, July 2, 2026. Link
2. Edwin Dorsey, "The Bear Cave #332" (acquisition announcement, including statements posted by Edwin Dorsey and Hunterbrook Media on X, June 28, 2026), The Bear Cave, June 29, 2026. Link
3. Edwin Dorsey, "The Bear Cave #333," The Bear Cave, July 5, 2026. Link
4. "Disclaimer," The Bear Cave, July 1, 2026. Link
5. Jenny Ahn, Michelle Cera, and Matthew Termine (eds. Jim Impoco, Wendy Nardi, and Sam Koppelman), "'House from Hell': How America's Largest Homebuilders Shift the Cost of Shoddy Construction to Buyers," Hunterbrook Media, June 26, 2025. Link
6. Bethany McLean, Matthew Termine, JD Jean-Jacques, and Sam Koppelman (ed. Jim Impoco), "Problems at StepStone," Hunterbrook Media, July 2, 2026. Link
7. "StepStone Stock Falls After Hunterbrook Short Report Flags $2.3 Billion Liability," Benzinga, July 2, 2026. Link
8. Activ8 Insights investigator database: The Bear Cave profile (94 reports analyzed, June 11, 2020 to May 21, 2026) and Hunterbrook Media profile (29 reports, April 2, 2024 to June 8, 2026), split- and dividend-adjusted prices through June 29, 2026.
9. Hindenburg Research, "A Personal Note From Our Founder," January 15, 2025. Link
10. Interview with David Capablanca, founder of Fugazi Research, conducted by Activ8 Insights, July 6, 2026.
11. Fugazi Research and Shortfinder, "Starlink Hype Meets Fraud Trail" (FreeCast, Inc., NASDAQ: CAST), June 29, 2026. Link
12. Interview with the Founder of Shortfinder, conducted by Activ8 Insights via email, July 6, 2026.
13. Activ8 Insights review of investigator social media accounts, July 2026. Follower counts as of July 6, 2026.

This article is provided by Activ8 Insights for informational and educational purposes only. It is not investment advice, nor a recommendation to buy or sell any security. Claims attributed to investigators, publishers, or companies are presented as their statements, not findings of fact. Performance figures are computed from Activ8 Insights' internal database and may differ from other sources depending on price adjustments and measurement windows. Readers should conduct their own research and consult a qualified professional before making investment decisions.