“Social Justice Shorting”: Making Millions By Betting Against Leftist Companies
Johnson has built a media empire through crowd-funding research, and publishing stories that oftentimes are left untouched or buried by the mainstream media. A vocal critic of today’s generation of Social Justice Warriors (SJWs), Johnson has used social media to push back against what he sees as “unnecessary virtue signaling.” So much so that he’s been banned from Twitter, which has several times championed itself as a platform of free speech.
Much of Johnson’s media empire was self-funded through investments that he’s made over the last four years since he began actively trading. According to Johnson, his strength is in shorting companies that signal their virtues to the market in the form of charitable gifting and large-scale “diversity” hires. (Shorting, or “short selling,” means he is betting that their share prices will fall, and he makes money if they do fall.)
During a podcast interview with internet philosopher Stefan Molyneux, Johnson divulged some of his tactics for shorting social justice “virtues.”
The main strategy he spoke of was what he called the “Johnson Dollar Diversity Dilemma Hypothesis,” which he described as having “a choice between dollars and diversity.”
Basically, in Johnson’s experience, he’s witnessed that CEOs and managers tend to make large charitable contributions and “diversity” announcements prior to a harsh downturn.
Much of his discussion was centred around Twitter [NYSE:TWTR], which has been on a relatively steady decline since April of 2015, falling from over $50 to a current $18.
Twitter has been falling steadily, despite adding several social signals that they’re a benevolent company that in CEO Jack Dorsey’s opinion is a “utility.”
While Johnson was shorting Twitter last year, the company published on their blog a post titled: “We’re committing to a more diverse Twitter.”
In the post, the social media giant made it clear that they wanted to increase the diversity of their staff, to “reflect the vast range of people who use Twitter.”
Twitter’s goals in that post included: Increase women overall to 35%; Increase women in tech roles to 16%; Increase women in leadership roles to 25%; Increase underrepresented minorities overall to 11%; Increase underrepresented minorities in tech roles to 9%; and Increase underrepresented minorities in leadership roles to 6%.
Johnson’s alarm bells went off.
“What my team essentially does a lot of the time is look at examples of social signalling on the part of the CEO or the management. So whenever they’re bragging about something like the number of black engineers that they hire, I call this part the ‘Oompa Loompa’ test. I don’t really care who makes my cell phone or the chocolate I eat or whatever. I just care that it works or that it tastes good,” says Johnson. Johnson says that if a company brags about hiring, for example, “more Black engineers,” it’s a sign that 1) they’re lying, since it’s statistically unlikely there are many of them; and 2) they’re trying to sell you on something that has nothing to do with their company’s products, which are therefore likely to be poor.
“It could be Martians, it could be robots, it could be Oompa Loompas, it doesn’t really matter.”
When Twitter made that announcement, the company was trading at $26.46, and now is at $18.38, a more than 30% reduction.
So Johnson may be on to something.
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Source: based on an article on StockSocial and information from National Vanguard correspondents