3 ms·
Oh, so you're saying the authors bet money on the truth of what they wrote? Good to know, my priors as to its accuracy went way up. You can go to prison for l
by samatman 4y ago
Oh, so you're saying the authors bet money on the truth of what they wrote?
Good to know, my priors as to its accuracy went way up.
You can go to prison for lying to make money, you know. It's not civil like libel, it's fraud.
- actionablefiber 4y agoIt's mechanically possible to come up with fake accusations, take on the short position, publish the accusations, and cash out on the immediate stock drop, since just publishing the report is itself a market moving event, betting that the SEC either won't notice or won't bring down the hammer hard enough to wipe out their gains. This might have happened before with a different short selling institution in 2019 when an investigator working with a hedge fund published a report accusing GE of accounting fraud[1]. The accusations led nowhere and GE's stock rebounded rapidly after an initial ~10% drop. I couldn't find details on who the fund was or if they made money cashing out on the dip. I don't think that's what Hindenburg is doing here, and they have a pretty good track record of spotting fraud (IIRC they've called it correctly on a lot of bad companies in the past few years). [1]https://en.wikipedia.org/wiki/Harry_Markopolos#2019_General_Electric_fraud_allegation https://en.wikipedia.org/wiki/Harry_Markopolos#2019_General_...
- everybodyknows 4y agoFurthermore, malicious prosecution on weak evidence is entirely possible. Give the podcast Wolfpack Research a listen, starting with Episode 15 -- "Kurt Feshbach".
- martincmartin 4y agoOh, so you're saying the authors bet money on the truth of what they wrote? Not quite. They bet money that they could convince other investors it was true. Big difference.