@manny100 I think you are correct that VGI saw the large margins and assumed something was afoot.
It's fair to say (whatever your view that they did do a good bit of diligence to check out that thesis.

Long and short thesis creep and confirmation bias are absolute killers. Anchoring bias is a killer too, it hurts to sell at a loss although that may be the right decision.

Other psychological biases are not understood by market participants, independant thinking is the real asset.

Most people admire managers and detest shortsellers.

If anything my preferences are too much the other way.

Rapid growth of a business either needs an industry with strong economics or fraud.

A "good" manager is one who can identify such economics and doesn't mind carrying a bunch of outside shareholders along.

Bill Gates and Steve Jobs spring to mind.

Normally competition takes away strong margins, capital should move into businesses like these.

So if you are long, what's the secret sauce that allows them to convert a 5% margin business into something much higher.

We hear that it's a proprietary non patented platform which immediately sounds like bullshit to me. There's loads of money going into developing great software - making software doesn't grant you huge margins.

A Ben Graham idealist would look at the historical earnings and the assets relative to the price and leave the opportunity to someone else. Personally I have a great dislike of growth stocks, because that's what everyone wants.

That expectation, the trust in management and rising shareprices provide the mulch for the mushrooms of fraud to thrive in the dark. Shortsellers bring in the sunshine and dry that nasty stuff out.

If you are short, tell me the scam.

Example: STMP should not exist because it made it's money purely from ripping off the U.S. postal service.

That's of no benefit to anyone, I like shorts that shouldn't exist.

Short research is proprietary just like long research. Except shortsellers often get lawsuits from fraudulent companies which are expensive to pay for and are generally complete B.S.

In fact suing shortsellers is a massive red flag, any company attacking shortsellers rather than focussing on the business has something to hide.

An honest business doesn't care about shorts at all.