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You could build a short position, publish fake research, and then quickly cover your short on the initial move before anyone had time to rebut you. That is defi
by ProjectArcturis 4y ago
You could build a short position, publish fake research, and then quickly cover your short on the initial move before anyone had time to rebut you. That is definitely illegal fraud, though, and both the target and the SEC would try to find you.
- maxbond 4y agoYou can say the same thing for the long side, but no one seems to mind when people go on TV and blow a bunch of smoke about their favorite companies. Yes this is theoretically possible but no it is not likely someone can make a career out of it. Short research isn't a magic wand that makes the price go down. Good faith short sellers have their positions blow up in their face all the time, sometimes just because people don't like them and wouldn't mind seeing them get their comeuppance. A short seller publishing in bad faith would be fighting an uphill battle while surrounded by easier grifts. Surely there must be some frauds among the short sellers some of them time, but there's a common view that it's all of them all of the time. From my perspective this appears to be a conspiracy theory among bulls who think that publishing negative information about any company is a threat to their portfolio, and reason backwards from there.