The Argument: Short Selling ruins Markets and Lives. PLEASE LIKE AND SHARE so we can bring you more!
Talk about each of the following risks:
- The stockholders could get angry and take drastic action if the board/management doesn't do something that's at best extreme and at worst terribly risky.
- The company would have trouble raising money through secondary offerings.
- The company might even run into trouble borrowing money, which could choke out the company's near-term operations and/or prevent strategic long-term investments, dropping its trajectory, market share, positioning, etc.
- The company could get bad press and customers/suppliers might pull existing business or hesitate to engage in new business with the company. Same goes for hiring new employees, particularly high-end talent.
Lucian Miers, a renowned short seller comments. People get very emotional about shorters. When you hold a share and it goes down and you're losing money, the first persons to blame is the shorters - its a bear raid, its negative people ruining a perfectly good British company. These are perfectly unsophisticated investors and the first line of attack is the shorters, the second line of attack is the management of the company. Have you ever been reprimanded or threatened with legal action?
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Related Videos (Lucian Miers and Simon Cawkwell)
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The Argument: Short Selling ruins Markets and Lives
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Shorting Shares at a Support Level / after a Major Downward Spike