Matt Levine of Bloomberg writes about Hunterbrook, the hedge fund that is producing news about companies and then trading on the information.

Levin writes, “One way to think of this business model is that Hunterbrook is essentially an activist short-selling hedge fund, like Hindenburg Research: It investigates companies, finds problems, shorts the companies, and then noisily publishes its investigation to draw attention to the problems. But whereas Hindenburg is straightforwardly a short-selling firm, Hunterbrook’s news site is at least theoretically independent of its hedge fund, and if it publishes enough good general news then perhaps it can become more widely read and trusted — and have more stock-price impact — than a pure hedge fund.

“Another way to think of this business model is that it is a salary arbitrage. It is expensive to hire hedge fund analysts to investigate companies all over the world. It is cheaper to hire journalists! You might find more tradable signals with 20 journalists than you can with one hedge-fund analyst.”

Read more here.