Why short sellers attack your stock
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Transcript of Why short sellers attack your stock
Disclaimer
This is not legal or investment advice of any kind
Seek competent advice from qualified attorneys and investment bankers
Your situation may vary
The more you know about finance and business, the more you can profit
Aggressive short sellers take steps to make sure that their trade works. They do not simply sell and hold
while praying for a profit. They get off their butt and do something to
get results.
Something to get results can be making public some information on the company like Mr. Ackmann's
presentation on Herbalife, or Muddy Waters exposing of Chinese stocks.
How would you like to come to your office and find out
you had been targeted?
Maybe you already have
Shorts can lobby the authorities to get prosecutions going
Shorts can make a continuous public relations campaign to warn customers away from the company
Predatory Short Selling
In fact, these steps are only limited by the imagination of the short seller, his budget, and the law.
Only One Will Survive
This puts you and the short seller in
a life or death battle.
Only one of you will survive.
The Company is Defenseless
Let me make you an analogy. Suppose this was a boxing
match. Pretend you are the short.
You know you are in a serious fight. The company does not.
As a serious fighter
and a short, you would prepare your
attack over time with great
enthusiasm.
The company does not prepare.
As the company does
not know it is in a fight, you can get
behind the company and hit it from
behind with a rabbit punch. The company will let you do that.
After your first
attack, the best the company will be
doing is to scramble to deny
your attacks. Confusion will
reign in their camp.
You, the short seller, will rain your heaviest
blows down on the company. The
company may not even defend itself.
When it realizes there is a fight,
the company will only try to defend
against your attacks, they never counter
attack.
You do not have to
disclose your name in reporting
your short position, so the
company may not even know who is
attacking them.
As a short, you have the advantage of
having considerable public information on the company. You can hire investigators to dig up even more.
Even if they try to be fair and balanced, they will always
present your side as a short seller and
the company's denials always look lame in the media.
The public, the authorities, the
shareholders, the media all join the
lynch mob. Enron.
WorldCom. HealthSouth.
If you like one-sided battles, where you
can kick your enemy in the groin all you want, without any risk of him kicking you back, predatory short selling is for
you.
Get my books on Amazon.com
How the Shorts Raid Your Stock,
Destroy Your Company and What
to Do About It