3 ms·
Incorrect. Shorting cannot make a company go bankrupt, because it has no effect on the operations. Having a low stock price will not make a profitable company b
by dcolkitt 6y ago
Incorrect. Shorting cannot make a company go bankrupt, because it has no effect on the operations. Having a low stock price will not make a profitable company become unprofitable.
All short sellers can do is reveal pre-existing flaws In the company. Which is why the presence of short sellers reduces corporate fraud
https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12369 https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12369
- dhruvdh 6y agoShorting can affect a companies ability to raise capital. All your comments sound like you live in a textbook, uncaring of what happens in the real world.
- fennecfoxen 6y ago> Shorting can affect a companies ability to raise capital. So can negative press coverage. And yes, either can prevent a company that is on the brink from staving off bankruptcy. It's questionable whether you ought to call the press coverage the cause of the problems, though, and the same objection applies to the shorting.