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Why don't more companies "engage and attack shorts"? Aren't people taking short positions on companies effectively lowering the stock price of the company compa

Why don't more companies "engage and attack shorts"? Aren't people taking short positions on companies effectively lowering the stock price of the company compared to someone just not buying their stock, and therefore doing potential damage to that company's valuation and future? I'm surprised any company has the time to engage and attack those kinds of threats, but I'm not surprised there is an incentive for them to do so. Is it just the lack of time (or maybe optics, for whatever reason) that other companies don't "fight back"?

Lazare 7y ago
> Why don't more companies "engage and attack shorts"? Because it's incredibly pointless, an utter waste of time, a distraction from things which actually matter, and can veer all-to-quickly into illegal actions as Musk has already found out? (His "taking Tesla private" tweet seemed to have been driven, in part, by a desire to punish shorts. It was later found, of course, to be illegal stock manipulation, and it wiped billions of dollars off Tesla's market cap.) > Aren't people taking short positions on companies effectively lowering the stock price of the company compared to someone just not buying their stock, and therefore doing potential damage to that company's valuation and future? In much the same way that people choosing not to buy Tesla shares do, yes. The effect is real, but even in extreme cases, trivial. It is quite clear that Musk has done vastly more damage to Tesla by worrying about short sellers than the short sellers themselves could have possibly done (eg, with his "taking Tesla private" tweet, but there are many other examples). > I'm not surprised there is an incentive for them to do so There is no incentive to do so. It is actively harmful.
refurb 7y ago
If you want to see the correct way to deal with a short seller, look up what HerbalLife did against Pershing capital’s massive short. They basically continued to grow and show positive financials. Eventually Pershing exited his position. It’s not worth playing a PR game. You’re just asking to get called out on some statement you made. The proof is in the pudding. Sell lots of cars. Don’t claim your going to sell 500,000 vehicles this year, then come back and say “oh, I meant if you annualized our peak month”.

Lazare 7y ago

> Why don't more companies "engage and attack shorts"? Because it's incredibly pointless, an utter waste of time, a distraction from things which actually matter, and can veer all-to-quickly into illegal actions as Musk has already found out? (His "taking Tesla private" tweet seemed to have been driven, in part, by a desire to punish shorts. It was later found, of course, to be illegal stock manipulation, and it wiped billions of dollars off Tesla's market cap.) > Aren't people taking short positions on companies effectively lowering the stock price of the company compared to someone just not buying their stock, and therefore doing potential damage to that company's valuation and future? In much the same way that people choosing not to buy Tesla shares do, yes. The effect is real, but even in extreme cases, trivial. It is quite clear that Musk has done vastly more damage to Tesla by worrying about short sellers than the short sellers themselves could have possibly done (eg, with his "taking Tesla private" tweet, but there are many other examples). > I'm not surprised there is an incentive for them to do so There is no incentive to do so. It is actively harmful.

refurb 7y ago

If you want to see the correct way to deal with a short seller, look up what HerbalLife did against Pershing capital’s massive short. They basically continued to grow and show positive financials. Eventually Pershing exited his position. It’s not worth playing a PR game. You’re just asking to get called out on some statement you made. The proof is in the pudding. Sell lots of cars. Don’t claim your going to sell 500,000 vehicles this year, then come back and say “oh, I meant if you annualized our peak month”.