Edwin Dorsey (@stockjabber) was my Skull Session guest back in April 2025, on Geoinvesting.com. The conversation brought back some memories from when I used to short stocks.
Some of you may not know this, but between 2010 and 2016, I was heavily engaged in short selling and fraud research at Geoinvesting, where we were uncovering and exposing pump & dumps and fraudulent China-based companies that had gone public in the U.S. through reverse mergers.
In total, we exposed 22 pump & dumps and dozens of china stock shams, culminating in 12 China based stocks trading in the U.S. getting halted and delisted.
You can read more about my history on this in a small reflection article I wrote in 2016, called The Evolution Of China Based Fraud, as well as in a 2017 documentary called the China Hustle (financed by Mark Cuban).
Dan Kunze , the first ever intern at Geoinvesting back in 2006, joined me as co-host for this Skull Session.
Edwin runs The Bear Cave and Sunday’s Idea Brunch Substacks.
You can read a Q&A session Edwin had with me on his Sunday’s Idea Brunch here, an opportunity I am incredibly appreciative of.
Edwin doesn’t actively run a short book himself, but many serious investors read his work to understand where hidden risk may be building.
He makes it clear that being a short seller or short activist demands that you need to look beyond the obvious and not naturally trust the narrative inside earnings calls, investor decks, and consensus models.
That’s why he spends time in places the crowd might ignore: SEC Freedom Of Information Act (FOIA) logs, audit partner records, obscure interviews, comment sections, and regulator complaint databases.
Consumer complaints, in particular, can reveal cracks long before financials do. Two companies can show similar growth and margins, but if one has a pattern of billing disputes, cancellation friction, or questionable practices, that friction eventually shows up in churn, pricing pressure, or regulatory scrutiny.
I’ll literally go chronologically through the last three years of reviews… I don’t care about the average reviews, and there’s a lot of frivolous complaints. But when you do this a lot, one out of every 20 times you’re going to see real issues. For example:
“I bought what all the former sales people were saying”
“I feel like I need to lie about the product’s capabilities”
“All our partners get upset that our product doesn’t live up to their expectations”. That’s a huge nugget of information” - Edwin Dorsey
Edwin’s New Tools
If you think it could be potentially useful to know if short sellers might have ammunition to discredit a stock you own… or if you want to avoid investing in stocks that might be prone to being pump and dumps or running into regulatory risks, you might be interested to know that Edwin has even built public tools to track stock promotion activity and regulatory breadcrumbs:
StopNasdaqChinaFraud.com: which tracks WhatsApp pump-and-dump chatter
StockPromotionTracker.com: which surfaces paid stock promotions
FOIAsearch.com: which flags regulatory breadcrumbs
In small and micro caps, promotion risk and governance issues are particularly important to be aware of… not just from a short selling strategy point of view, but also from the perspective of being a long only investor.
On the thematic side, Edwin is focused on businesses on the wrong end of change, particularly around AI. In hindsight, this is pretty relevant right now, with software stocks getting crushed over similar fears.
For a more current take on the software vs. AI debate, you can listen to my Skull Session with Ben Brostoff I published a few days ago, here.
Edwin was early on Chegg (CHGG), arguing that AI tools permanently impair its core value proposition. He has also looked at call centers and workflow-heavy businesses that may struggle if automation meaningfully reduces labor needs.
Cautious On Signet
A detailed example Edwin walked through to get a glimpse of his investigatory process was Signet (SIG), owner of Kay, Zales, and Jared. His thesis centers on lab-grown diamonds.
He argues that lab-grown diamonds are chemically identical to natural diamonds, far cheaper to produce, and increasingly accepted by younger consumers. At the same time, prices for both natural and lab-grown stones have been trending lower.
Signet holds billions in natural diamond inventory. If prices continue to decline, Edwin believes the issue isn’t just margin compression. It becomes inventory and balance sheet risk.
He compared it to aluminum, which was once considered precious before production scaled and prices collapsed. The prestige disappeared when supply expanded. His view is that diamonds could face a similar structural shift.
Bullish In Rave
What I didn’t realize before my conversation with Edwin is that even though his Bearcave newsletter frequently covers billion-dollar market-cap short ideas, he prefers to actually invest in microcaps with his own money.
One bullish idea he discussed was Rave Restaurant Group (RAVE), a small pizza franchisor showing early signs of stabilization under an experienced CEO, Brandon Solano, who was key to helping to turnaround $DPZ years ago.
With a clean balance sheet and improving same-store sales, he sees the potential for a long-term upward re-rating if execution holds.
Interestingly, RAVE is in my microcap quality index at my Substack, Microcap Investing Cliff Notes.
Anyways… I think you’re going to really like my conversation with Edwin, especially if you run a Substack and would like to be inspired by someone who’s had tremendous success on the platform. You can tell that Edward likes what he does.
Also, if you’re considering becoming a short seller, this Skull Session is for you.
