Short Sellers Had a Big Week. And Every Target Paid For It.
A Look Back at Last Week: Monday, March 16, 2026
Short selling is having a moment in popular culture. NPR's Planet Money dedicated a bonus episode to HBO's Industry this week, exploring how the show portrays a short-selling hedge fund taking on a fraudulent fintech and drawing parallels to real-world activist campaigns. Reuters columnist Marty Fridson made the case that conditions are finally shifting back in short sellers' favor after years on the sidelines. On the research front, four reports landed and every target closed the week lower. Ningi Research dropped a sweeping investigation into Swedish holding company Kinnevik, alleging the firm secretly financed its own employee to buy distressed assets at 28 cents on the dollar, the stock fell 15.9%. GlassHouse Research targeted Canadian dividend stalwart Exchange Income Corporation, arguing its celebrated payout is engineered rather than earned. Wolfpack Research exposed a related-party arrangement behind Babcock & Wilcox's $2.4 billion deal, sending BW down 28.8%. Fugazi Research closed things out with a devastating look at Cardio Diagnostics, which fell 38.6%. We also published our February 2026 Monthly Short Selling Report check out the results!
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- Ningi Research targeted Kinnevik AB (KINV-B.ST) alleging the Swedish investment company secretly financed one of its own employees to purchase distressed portfolio assets at 28 cents on the dollar while concealing a SEK 7.1 billion accounting graveyard and leaving 50% of NAV exposed to Agentic AI disruption. Stock closed the week down 15.9%.
- Glass House Research targeted Exchange Income Corporation (EIF.TO) alleging the Canadian aviation and manufacturing company manufactures its dividend coverage through shifting accounting definitions and continuous external financing, with conventional free cash flow of just $23.4 million against $541 million in management-defined FCF. Stock closed the week down 1.6%.
- Wolfpack Research targeted Babcock & Wilcox Enterprises (BW) alleging the company's $2.4 billion deal was structured with a counterparty controlled by BW's own largest shareholder and misrepresented in the press release that drove a 75% stock run-up. Stock closed the week down 28.8%.
- Fugazi Research targeted Cardio Diagnostics Holdings (CDIO) alleging the de-SPAC generated just $11,270 in revenue over nine months against multi-million dollar losses, relying on equity dilution rather than commercial traction, with serious questions about undisclosed recipients of a post-closing share transfer. Stock closed the week down 38.6%.
New from Activ8 This Week
Our February Monthly Report is out. This members-only report covers the full month's activity, tracks cumulative stock performance across all targets, highlights the most credible ongoing short theses, and identifies patterns worth watching heading into Q2. Create your free account to access it.
New Activist Reports
| Metric | Price (SEK) | Change |
|---|---|---|
| Close (Day Before) | SEK 61.76 | — |
| Low (Report Date) | SEK 49.72 | -19.5% |
| Close (Report Date) | SEK 51.28 | -17.0% |
| Close (End of Week) | SEK 51.94 | -15.9% |
Stock Price Impact
KINV-B.ST hit an intraday low of SEK 49.72 on March 9th — a 19.5% drop — before partially recovering to close at SEK 51.28, down 17.0% on the day. By week's end the stock settled at SEK 51.94, still down 15.9%. For a holding company like Kinnevik, whose reported net asset value drives how the market prices the stock, allegations of material NAV overstatement tend to establish a new lower baseline rather than prompt a quick recovery.
About Kinnevik AB
Kinnevik AB is a Swedish investment holding company headquartered in Stockholm focused on technology, software, and healthcare. It holds stakes in private growth businesses including Spring Health, TravelPerk, Mews, and Pleo, and trades on Nasdaq Stockholm as a Class B share. The company pivoted away from telecom in recent years to concentrate on software and tech, and has publicly acknowledged it expects a materially lower investment pace in 2026 due to capital recycling constraints.
Key Points from the Report
- The report alleges Kinnevik secretly financed its own employee to acquire three distressed portfolio companies through a vehicle called 100A — incorporated with just £1 in capital days before closing — with SEK 366 million in "Divestments Not Paid" appearing in Kinnevik's Q1 2025 report alongside a long-term receivable consistent with seller financing, yet the arrangement was never disclosed to investors.
- Ningi alleges a SEK 7.1 billion accounting graveyard has accumulated in an opaque "Other Unlisted Investments" line item: SEK 10.1 billion in invested capital against just SEK 3 billion in fair value, with SEK 6.1 billion migrating in between 2023 and 2025 while fair value rose by only SEK 65 million.
- The report alleges Kinnevik deployed SEK 4.4 billion into companies connected to its own board members, including SEK 2.2 billion linked to former board member Harald Mix — Aira Group AB is in Barclays-advised restructuring and Stegra saw its fair value cut in half amid insolvency concerns.
- According to Ningi, approximately 50% of Kinnevik's NAV sits in software intermediaries whose business models are being structurally bypassed by Agentic AI platforms, rendering their only competitive moat redundant rather than merely threatened.
Read the Full Report Summary →
| Metric | Price | Change |
|---|---|---|
| Close (Day Before) | $101.04 | — |
| Low (Report Date) | $96.00 | -5.0% |
| Close (Report Date) | $99.62 | -1.4% |
| Close (End of Week) | $99.41 | -1.6% |
Stock Price Impact
EIF.TO dipped to an intraday low of $96.00 on March 9th before recovering to close at $99.62, down 1.4% on the day. The muted reaction isn't unusual for a thesis this layered — GlassHouse's case is built on accounting methodology reconstruction, satellite imagery, and primary-source interviews rather than a single dramatic revelation. By week's end the stock sat at $99.41, down 1.6%. The central question GlassHouse is raising — whether EIC's dividend can be sustained without perpetual external financing — tends to get answered over quarters, not days.
About Exchange Income Corporation
Exchange Income Corporation is a Canadian acquisition-focused company headquartered in Winnipeg operating across aerospace and aviation and manufacturing. Its aviation subsidiary, Regional One, leases and trades regional aircraft globally. EIC generates approximately $3.3 billion in revenue and is known in Canadian income-investor circles for its dividend track record. In March 2026, EIC priced a $600 million inaugural bond offering, which GlassHouse characterizes as confirmation that the dividend model depends on continuous external financing rather than organic cash surplus.
Key Points from the Report
- GlassHouse alleges EIC's management-defined free cash flow of $541 million in 2025 bears little relationship to conventional free cash flow of just $23.4 million for the same period, with the gap sustained by removing working capital changes and applying a Maintenance CapEx methodology that changed three times in six years — each time flattering the payout ratio.
- The report presents satellite imagery and on-the-ground verification showing roughly 33% of Regional One's fleet in storage at Ascent Airfield in Arizona since COVID, with many aircraft having no engines while still classified as fixed assets. A former Regional One executive told GlassHouse these aircraft should be in inventory, adding roughly $30 million to disclosed values.
- According to GlassHouse, Regional One relieves inventory costs using an expected-selling-price methodology rather than historical cost as peers use — a former employee described it as allowing management to hit margin targets: "When they need to hit a number, it's easy for them to do that."
- The report shows EIC's internal cash generation has been insufficient to fund all obligations simultaneously in nine of the last ten years, averaging a deficit of approximately $128 million annually — bridged by revolving credit, convertible issuance, equity dilution, and the March 2026 $600 million bond offering.
Read the Full Report Summary →
| Metric | Price | Change |
|---|---|---|
| Close (Day Before) | $14.76 | — |
| Low (Report Date) | $12.71 | -13.9% |
| Close (Report Date) | $13.05 | -11.6% |
| Close (End of Week) | $10.51 | -28.8% |
Stock Price Impact
BW fell to an intraday low of $12.71 on March 12th — down 13.9% — before closing at $13.05, an 11.6% decline. The real damage came in subsequent sessions as investors worked through Wolfpack's findings, with the stock finishing the week at $10.51, down 28.8%. BW had already run up approximately 75% from March 3rd on the deal announcement Wolfpack is dissecting, so the weekly close effectively unwinds a substantial portion of that premium as the related-party structure comes into focus.
About Babcock & Wilcox Enterprises
Babcock & Wilcox Enterprises is a power generation equipment company headquartered in Barberton, Ohio, with a history going back to the 19th century. It designs and manufactures steam generation and environmental equipment for utility, industrial, and government customers across more than 90 countries. BW emerged from bankruptcy in 2021 and its largest shareholder is B. Riley Financial (RILY), which holds approximately 24.7% of outstanding shares — a relationship that sits at the center of Wolfpack's thesis.
Key Points from the Report
- Wolfpack alleges BW's press release described its deal counterparty, Base Electron, as an Applied Digital "subsidiary," while APLD's own same-day 8-K called it an "independent company" in which APLD holds only a 10% equity interest. Base Electron was incorporated in Nevada in December 2025 — a month after BW announced the original deal — shares a headquarters address with RILY, and has Bryant Riley serving as a director.
- The report highlights that APLD's guarantee of Base Electron's approximately $434.8 million fixed-fee obligation dissolves entirely if Base Electron lists publicly or raises $50 million independently, meaning APLD can exit its full guarantee for as little as $50 million.
- Wolfpack's review of county board meeting minutes in Louisiana and South Dakota found both sites plan to draw conventional grid power from utilities with no mention of BW, undermining the commercial rationale for the deal.
- Stripping out Base Electron, BW's underlying bookings fell 27% year-over-year, backlog declined 14%, and the company's own 2027 revenue forecast from existing backlog collapsed 78% in a single year. Bryant Riley also sold $10.4 million in BW stock at $9.00 per share on February 11 — three weeks before the NTP announcement drove the stock to $14.76.
Read the Full Report Summary →
| Metric | Price | Change |
|---|---|---|
| Close (Day Before) | $4.56 | — |
| Low (Report Date) | $2.56 | -43.9% |
| Close (Report Date) | $2.80 | -38.6% |
| Close (End of Week) | $2.80 | -38.6% |
Stock Price Impact
CDIO fell to an intraday low of $2.56 on March 13th — a 43.9% drop — before closing at $2.80, down 38.6%, with no recovery into the weekend. The severity reflects both the weight of Fugazi's allegations and the fact that the stock had been inflated by a February 19th investor call containing no new financial disclosures that sent shares up 450% over eight trading days. Fugazi published shortly after that promotional peak. For micro-caps priced almost entirely on narrative, when the story breaks, the move down tends to match the move up.
About Cardio Diagnostics Holdings
Cardio Diagnostics Holdings is a cardiovascular diagnostics company headquartered in Chicago that markets two AI-powered epigenetic testing products: Epi+Gen CHD and PrecisionCHD. The company went public in October 2022 through a de-SPAC merger and trades on Nasdaq. Despite nearly four years as a public company, it has generated approximately $65,000 in cumulative revenue while raising more than $15 million through equity sales. The company executed a 1-for-30 reverse stock split in June 2025 solely to regain Nasdaq bid price compliance.
Key Points from the Report
- According to Fugazi, the SPAC's CEO simultaneously served as managing director at its own underwriter — a conflict disclosed in the S-4. The SPAC reviewed more than 20 failed candidates before selecting Cardio Diagnostics, which had generated just $901 in total lifetime revenue at the time, and the same sponsor's two prior de-SPACs combined to destroy approximately 99% of investor capital.
- The report alleges that the day after closing, Mana Capital LLC transferred 1.565 million shares and 2.5 million warrants to Juventus LLC and other unidentified recipients at zero consideration — with no successor beneficial ownership report filed with the SEC since, leaving the ultimate beneficiaries unknown.
- Fugazi highlights that CDIO's net margin for the nine months ended September 30, 2025 was approximately negative 44,500%: the company lost more than $445 for every $1 of revenue, with CEO salary alone exceeding 26 times total nine-month revenue.
- The report places CDIO in Phase 5 of a classic microcap death spiral with roughly 13 months of estimated runway, a $5.86 million ATM overhang equal to approximately 65% of market cap, and a float expanded 476% since the de-SPAC with no corresponding commercial growth.
Read the Full Report Summary →
Activ8 Newswire
Short sellers steal the show on HBO's Industry — NPR's Planet Money dedicated a bonus episode to HBO's Industry this week, breaking down the show's portrayal of a short-selling hedge fund exposing a fraudulent British fintech and the real-world parallels to activist short campaigns. Source: NPR / Planet Money
Marty Fridson: it's time for short sellers to make a comeback — Reuters columnist Marty Fridson argued this week that activist short sellers provide a valuable service to markets and that conditions are finally shifting in their favor after years of difficulty in a persistent bull market. Source: Reuters
Hindenburg Research speaks at UConn's annual Finance Conference — UConn's student-run Finance Society hosted its 10th annual conference at Morgan Stanley headquarters in Manhattan, with Hindenburg Research among the speakers at an event that drew nearly 100 students and 60 Wall Street alumni — double last year's attendance. Source: UConn Today
Financial Times on activist short selling — The Financial Times covered the activist short selling world this week in a piece worth reading for anyone following the space. Source: Financial Times
