We've been hearing today that Pirate Capital might be imploding. Commenters have told us that "all of Pirate's analysts quit" and claimed that the SEC raided its offices this morning. Several calls this morning to people at Pirate Capital went directly to voicemail, and messages left went unreturned. A few moments ago we reached an actual human being at Pirate.
"No comment," the actual human being said. When asked to identify herself, actual human being said, "Well, I'm just a temp."
So the temps are handling press calls? That doesn't seem like a good sign.
On Tuesday, the Wall Street Journal reported that the SEC is investigating whether activist hedge fund violated securities laws by failing to properly disclose it was selling stocks.
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[Ed.--You may remember Pirate Capital as the smallish hedge fund ($200 mil under management) that was the primary narrative thread in this New York Magazine cover story, wherein they claimed 32% returns. Here's how they apparently explained hedge fund investings to the reporter:
To run money, which is how managers refer to what they do, requires little more than a few computers. Zach’s boss likes to say, “I could run $100 million by myself.” The theory is that they’ve got an almost athletic gift for investing. They’re the type who can, as one manager did, call the direction of the market correctly 22 days in a row.