How Grizzly Research’s Siegfried Eggert Unearthed PDD’s Backdoor For Malware

Many short sellers have been leaving the market, but one prominent name remains: Grizzly Research. In an interview with Hedge Fund Alpha, Siegried Eggert of Grizzly Research shared details on his background, opportunities in short selling and plans for the near future.

Background on Siegfried Eggert

Born and raised in Germany, Eggert studied in the Netherlands and a bit in China. He worked in investment banking for a while in Vienna, Austria, coming to the U.S. for his graduate studies and then settling in Rochester, New York. Next, he started working at GeoInvesting in the Philadelphia, Pennsylvania area.

“GeoInvesting was in the very early days of what I would call modern activist short-selling, one of the pioneering firms, in my opinion,” Eggert said. “The company was also prominently featured in the documentary The China Hustle. And one of the things that GeoInvesting did, maybe even also before I came, was that they really did in-depth due diligence that other people didn’t necessarily do, where most of Wall Street was just inclined to trust the numbers. GeoInvesting went out and sent an investigator to do a site visit and check if the facilities even exist. And they found a lot of fraud.”

Also see: Grizzly Research short idea presented at Hedge Fund Alpha Conference is down 25%

According to Eggert, much of the fraud was related to U.S.-listed companies with operations in China or otherwise far away from U.S. jurisdictions. He said at one time, no one in the U.S. did due diligence. All bankers and service providers were excited about these businesses, wanting to partake in the rise of China as an economic power and the great companies that would be built there.

“A lot of people then eventually abused this and promoted companies on U.S. stock exchanges under false pretense,” Eggert added. “And Jim Westing was one of the pioneers in this area to uncover fraud there early.”

Editor’s note:   Many short sellers hide their identity. and for doo reason. This is done to avoid retribution from companies or crazy investors. Siggy revealed his identity publicly for the first time in 2020. The reveal was done through an interview with Hedge Fund Alpha right before our virtual event where SIggy featured a short.

An early attraction to investing

Eggert’s parents weren’t professional investors, both working as dentists, but his father has been an investor for a long time, so he always had someone who was interested in investing in his life. He thought it was an interesting area of direction to go into the stock market initially.

For his education, Eggert chose an international path, not wanting to stay in his little village and instead choosing some different areas as locations for his studies to see the world.