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This is the true value of short sellers to the market. They were blowing the whistle on Wirecard for years before the regulators or company insiders did anythin
by camjohnson26 6y ago
This is the true value of short sellers to the market. They were blowing the whistle on Wirecard for years before the regulators or company insiders did anything. The problem is they always look like fools while the company valuation goes up but then get vindicated all at once when it collapses, if it ever collapses.
- Traster 6y agoThis is the problem with short setlling - you don't need the company to be a fraud, you need it to be publicly outed as a fraud in a timeframe you can afford. This is what distinguishes 'The Big Short' and Bill Ackman with Herbalife. The mortgage crisis had a timeline for when the collapse would happen, that was the key. With Herbalife it was down to Ackman to convince the entire market that Herbalife wasn't a real business.
- dna_polymerase 6y agoHerbalife still is a 'real' business. Ackman would like you to think otherwise but it still is. The whole thing might be a point against short sellers.
- AndrewBissell 6y agoAnother famous short seller, John Hempton, responded to Ackman's short with a very public investment case for going long Herbalife (he argues it's a kind of social club with supplement sales attached as dues). Short sellers definitely don't bat anything close to 1.000 though.
- Apocryphon 6y agoSounds like regulators have found Herbalife to be fraudulent after all, even if it hasn't affect it's stock price too much. https://dealbreaker.com/2020/05/herbalife-fined-for-china-bribery https://dealbreaker.com/2020/05/herbalife-fined-for-china-br...