Hedge Fund Targets Aerohive

Aerohive has been doing quite well since their IPO. There are always areas for improvement, but all-in-all, I’m happy with the company’s numbers to date. Which brings me right to my point. There’s been something fishy going on with Aerohive’s stock prices. Early on, I was suspicious that it was being artificially held down, but not being a financial analyst myself, I had no understanding how that could be happening. Now I know. Grrrr….. Sometimes I should just let things go because what I discover when I peel back the layers of the onion make me want to place a call to my friend Guido.

Let’s start with the latest suspicious activity…

Aerohive made its numbers. The stock just sat there…like a deer in headlights. Hmmm.

Then, there was the HP/Aruba announcement. I rejoiced, knowing full-well what that means for Aerohive. I was stoked. But then, the stock went up a little, and again, is just sitting idle.

Enough was enough. I called upon an amazing researcher friend – let’s call him David. David digs and digs and digs, and isn’t afraid to learn new things, and to call people, and to dig some more. David dug up some nasty stuff for us this week.

Zacks (shills for hedge funds) rates Aerohive as a strong sell when everyone else doesn’t.  Hedge funds typically go long or short on stocks and then manipulate the market via press releases, bogus investigations, and that sort of non-sense in order to artificially inflate or deflate the public’s confidence in a stock (so that people will buy or sell it).

Then there were the four press releases about Aerohive being investigated that were rapid-fire published over the last week.

http://finance.yahoo.com/news/scott-scott-attorneys-law-llp-190200771.html

http://finance.yahoo.com/news/attention-aerohive-shareholders-shareholder-rights-010100866.html

http://finance.yahoo.com/news/investor-alert-investigation-behalf-investors-221700609.html

http://finance.yahoo.com/news/harwood-feffer-llp-announces-investigation-000000288.html

Anybody notice any similarities? I sure do. Oh, and the timing is, well, uncanny, right? Wrong. Planned is the word I’d use. By whom though? Ambulance-chasing trolls don’t get together on weekends to have beer, hotdogs, and to plan an investigation party against some smallish Wi-Fi company.

Out of curiosity, when the first one popped up, I called. I spoke with Joe Halloran at Scott and Scott. When asked why the press release was so vague, he readily admitted that the press release was intentionally vague and that the purpose of it was to get people to call them. He kept using the word potentially, as in “you could potentially be the lead plaintiff in a class action suite and potentially be rewarded a settlement…blah, blah, blah.” I smelled a rat straight away.

He asked about my number of shares, and the usual fare, but when I asked him what was being investigated, he said that he couldn’t share that. So I kept asking questions, as I usually do, and it quickly came out that there was no plaintiff, nor was there a subject of investigation. They were hoping that a major stockholder would be their “lead plaintiff in a class action lawsuit” and complain about something that they could then investigate. Boiled down, the press release is a smear campaign against Aerohive. But why?

Over the two days that followed, there were two more such press releases, that looked almost identical, but had slightly rearranged words. They looked just official enough to scare a moron into dumping their stock out of fear. That’s when my investigation began. An investigation begins with asking questions…

So, who owns Aerohive stock?

Who is Cadian Capital?

What is a hedge fund?

Why do they hold so much Aerohive stock?

My buddy David sure knows how to research…geez that guy is good.

So what do we suppose is happening that would artificially keep Aerohive’s stock down? Did you catch that bit about spread false rumors? Having three separate law firms say that they are “investigating” Aerohive is enough to scare many {dumb} people into selling their stock, which would drive down the price and then allow the hedge fund to make money on their short positions.

If you think that I’m fabricating some tale, please Google, “how do hedge funds manipulate stock prices” and follow your nose from there.

Hedge funds exist for one reason: to make rich people richer at the expense of the middle class, through market manipulation.

I’ve never sold one share of my Aerohive stock, and I believe that it’s a good investment at the moment, especially given the HP/Aruba deal. I for one will be buying MORE Aerohive stock because I believe they’re headed in the right direction and because a nice acquisition is imminent.

If you know any hedge fund managers, punch them in the face and tell them the Devinator says hello. #JustSayin