Monthly Report7 min read

March 2025 Activist Short Selling Report

March 2025 Activist Short Selling Performance Report 15 Total Reports -7.4% Average Impact 53.3% Success Rate March 2025 delivered a divided month for activist short sellers. While individual…

Activ8 Newsroom • December 12, 2025

March 2025

Activist Short Selling Performance Report

Total Reports

-7.4%

Average Impact

53.3%

Success Rate

March 2025 delivered a divided month for activist short sellers. While individual campaigns produced some devastating hits, the overall success rate of 53.3% marks a middling month where slightly more than half of targets declined. Blue Orca Capital's devastating takedown of Hesai Group produced the month's most significant impact at -35.0%, while several established firms saw their targets move higher. The month featured a strong narrative focus on corporate governance issues, with reports on convicted felons running operations, fake testimonials, and alleged financial manipulation drawing significant market attention.

Top Performers

Biggest Declines Following Short ReportsHSAI
-35.0%
Blue Orca Capital
GRRR
-26.3%
The Bear Cave
RUM
-25.3%
Pelican Way Research
APP
-17.7%
Muddy Waters Research
COCO
-13.3%
BMF Reports

The month's biggest winner tells a compelling story. Blue Orca Capital's investigation into Hesai Group (HSAI) exposed alleged military ties the company had denied under oath, documenting their LiDAR technology appearing on Chinese military vehicles. The combination of potential DoD lawsuit defeat, undisclosed contract termination fees, and questionable Mercedes partnership claims sent the stock down 35%. Meanwhile, Pelican Way Research's debut on Rumble delivered a 25.3% decline by highlighting the platform's tiny 0.7% market share and unsustainable creator economics.

Bottom Performers

Reports That Missed the MarkOSIS
+13.9%
Culper Research
OSIS
+6.2%
BMF Reports
RELY
+6.0%
Spruce Point Management
RELY
+4.9%
BMF Reports
IBTA
+4.7%
The Bear Cave

OSI Systems proved to be the month's most resilient target. Despite facing reports from both Culper Research and BMF Reports alleging undisclosed related-party transactions and questionable contract execution, the security systems manufacturer saw its stock rise. Both OSIS reports focused on the company's Albanian operations and Mexico contract concerns, but the market appeared unconvinced. Remitly (RELY) similarly shrugged off reports from Spruce Point and BMF alleging fake testimonials and review manipulation, with shares rising despite both attacks.

Market Breakdown

Exchange Distribution

NASDAQ

10 reports (71% of total)

Avg. Impact: -8.1% | Success: 60%

NYSE

4 reports (29% of total)

Avg. Impact: -1.0% | Success: 25%

Geographic Distribution

🇺🇸

United States

🇨🇳

China

🇧🇷

Brazil

NASDAQ dominance with a twist. NASDAQ-listed stocks represented 71% of March targets with a 60% success rate and -8.1% average impact. The four NYSE targets proved more resilient, with only a 25% success rate and -1.0% average impact. Notably, the month's best performer (HSAI at -35.0%) was NASDAQ-listed while the most resilient target (OSIS at +13.9%) was also on NASDAQ, highlighting the exchange's volatility for short targets. The geographic mix remained heavily US-focused, though the lone Chinese target (Hesai) delivered the month's biggest decline.

Industry Analysis

Industry	Reports	Avg. Impact	Key Targets
Auto - Parts	1	-35.0%	HSAI
Software - Application	3	-12.8%	APP, RUM, IBTA
Beverages	2	-13.3%	COCO
Oil & Gas Equipment	1	-11.5%	SEI
Financial Services	1	-7.0%	XP
Computer Hardware	1	+1.7%	IONQ
Software - Infrastructure	2	+5.5%	RELY
Hardware & Equipment	2	+10.0%	OSIS

Auto parts and software applications led declines. Hesai's LiDAR business in the auto parts sector delivered the month's worst performance at -35.0%. Software application companies faced meaningful pressure, with APP, RUM, and IBTA averaging -12.8%. On the flip side, hardware and equipment targets proved resilient, with OSIS shrugging off multiple reports. The quantum computing space (IONQ) and software infrastructure (RELY) also showed resistance to short pressure despite detailed critical reports.

Firm Rankings

Research Firm Performance - March 2025Blue Orca Capital
1 Report | -35.0% Avg
100%
Pelican Way Research
1 Report | -25.3% Avg
100%
Muddy Waters Research
1 Report | -17.7% Avg
100%
Ningi Research
1 Report | -13.3% Avg
100%
Morpheus Research
1 Report | -11.5% Avg
100%
The Bear Cave
2 Reports | -10.8% Avg
50%
Grizzly Research
1 Report | -7.0% Avg
100%
BMF Reports
4 Reports | -0.3% Avg
25%
Kerrisdale Capital
1 Report | +1.7% Avg
0%
Spruce Point Management
1 Report | +6.0% Avg
0%
Culper Research
1 Report | +13.9% Avg
0%

Quality over quantity defined March's leaderboard. Blue Orca Capital's single devastating report on Hesai earned them the top spot with a -35.0% impact. Pelican Way Research made a strong debut with their Rumble takedown at -25.3%. Muddy Waters' follow-up on AppLovin delivered -17.7%. BMF Reports had the highest volume with 4 reports but only a 25% success rate and near-zero average impact, illustrating how quantity doesn't guarantee quality. Notably, three established firms (Kerrisdale, Spruce Point, Culper) saw their targets rise rather than fall.

Notable Campaigns

Hesai Group (HSAI)

Blue Orca Capital | -35.0%

Blue Orca exposed alleged military ties that Hesai had denied under oath, documenting LiDAR technology on Chinese military vehicles. The report predicted the company would lose its DoD lawsuit, potentially costing 40% of revenue from GM and Amazon contracts.

Military Ties DoD Risk

Solaris Energy (SEI)

Morpheus Research | -11.5%

Morpheus revealed that Solaris acquired a company from a convicted felon who served 5 years in federal prison. The report detailed 96% revenue concentration with Elon Musk's xAI data center operating without air permits.

Convicted Felon Single Customer

AppLovin (APP)

Muddy Waters Research | -17.7%

Muddy Waters' follow-up report provided technical evidence that AppLovin built a covert user-tracking system to bypass Apple's privacy restrictions, potentially violating ATT policy and risking platform access.

Privacy Violation Platform Risk

XP Inc. (XP)

Grizzly Research | -7.0%

Grizzly accused the Brazilian fintech of operating a "Madoff-like Ponzi scheme" through internal funds generating implausibly consistent returns. XP has filed a defamation lawsuit against Grizzly in response.

Ponzi Allegations Legal Battle

Strategic Insights

Military and Government Ties Create Maximum Impact

Blue Orca's Hesai report demonstrates how national security concerns can devastate stocks. When companies deny military connections that evidence contradicts, the credibility gap becomes catastrophic. The 35% decline shows markets taking geopolitical risk seriously.

Character Attacks on Executives Gain Traction

Morpheus Research's SEI report succeeded partly by highlighting executive criminal history. A convicted felon running operations, combined with 96% customer concentration, created a compelling narrative that drove an 11.5% decline despite the company's momentum.

Volume Without Quality Dilutes Impact

BMF Reports published 4 reports in March but achieved only 25% success rate and -0.3% average impact. This contrasts sharply with firms that published one devastating report (Blue Orca: -35%, Pelican Way: -25.3%). Market attention is finite.

NASDAQ Targets Show Higher Volatility

NASDAQ-listed stocks delivered both the best (-35.0% HSAI) and worst (+13.9% OSIS) short target performances. The exchange's tech-heavy composition and retail investor presence create more volatile reactions to activist reports.

Coordinated Reports Don't Guarantee Success

Both OSIS and RELY faced reports from multiple firms (Culper/BMF for OSIS, Spruce Point/BMF for RELY) yet both stocks rose. This suggests markets may discount "pile-on" reports or that the underlying theses simply weren't compelling enough.

Bottom Line

March 2025 demonstrated that quality research trumps quantity. Blue Orca's devastating Hesai takedown and Pelican Way's successful debut with Rumble showed that well-documented national security concerns and structural business model flaws can move markets significantly. However, the 53.3% success rate reminds us that short selling remains a challenging endeavor.

The month's failures are equally instructive. Established firms like Kerrisdale, Spruce Point, and Culper all saw their targets rise, while BMF's high-volume approach yielded minimal results. As we move into Q2, the market appears to be demanding more rigorous evidence and more compelling narratives before rewarding short sellers with meaningful price declines.

March 2025 Report

Activist Short Selling Performance Analysis

Tracking the effectiveness of activist short selling campaigns and research-driven investment strategies.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. The success rates and returns mentioned represent price movements following report publication and do not account for trading costs, timing, or other factors. Always conduct your own due diligence before making investment decisions.