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ForHackernews

Why do you dislike short-sellers? I think it's wonderful when they're pointing out the emperor has no clothes!

In order to have a functioning market, we need to base valuations on more than just "stonks go up".

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Seriously Wirecard was sniffed out by so many short sellers, and eventually shorting it was banned... look at it now.

Same rhetoric, companies, securities, politics.

Everyone with the right ideas, the right motions, is always attempted to be silenced.

Life really is a circle.

The regulatory process failed but was revealed. Hopefully Germany will do better.

But the US has more companies and activities going on and likely more fraud just by volume if not the regulatory capture and other issues from the current administration like secretaries who want to dismantle their departments. The administration itself is fraudulent, laundering campaign money to private property or court/lawyer costs, or simply rewarding friends like the current USPS head donating a bunch of money to the GOP then getting their position while holding millions in stock of USPS competitors. It's just so blatant and corrupt but nothing happens.

A big part of private equity getting to insane valuations like WeWork is that nobody can short it.

Nothing wrong with healthy debate and dragging things into the sunshine. And there's obviously some fraud going on here.

But when shorts simply make up stories out of spite or manipulation, like those guys screwing with Tesla calling it fraudulent, it's exactly like pump and dump in reverse. The difference might be that shorts are stuck when a stock is rising legitimately and have no recourse but to use fabrication.

"Pump-and-dump is an illegal scheme to boost a stock's price based on false, misleading or greatly exaggerated statements" - Investopedia

> But when shorts simply make up stories out of spite or manipulation

Well it's a good thing that's illegal and there are whole departments in the US government that exist to deal with it.

Funny, though, that there hasn't been (edit: m)any securities fraud investigations of short sellers in recent memory.

Makes you wonder who the real liars are: the shorts, or the targets of them?

Can't leave that hanging... have any details?

Details about what? Examples where the shorts were right and the targeted companies were full of it?

Is Nikola and Wirecard enough, or do you want me to go digging for more examples?

No, wondering about the case where the shorts were acting in a public and illegal manner and the SEC did not indict anyone. Is that not an SEC priority or is there a policy to let it go? Is there more "untouchable" aspect going on? Is the bar of proof too high? They certainly have gone after insider trading in recent times.

What, you mean like this guy?

https://www.sec.gov/news/press-release/2018-190

> The SEC’s complaint charges that Gregory Lemelson and Massachusetts-based Lemelson Capital Management LLC issued false information about Ligand after Lemelson took a short position in Ligand in May 2014 on behalf of The Amvona Fund, a hedge fund he advised and partly owned.

Or maybe this guy?

https://www.sec.gov/news/press/2008/2008-64.htm

> The SEC alleges that five months ago, Berliner disseminated the false rumor through instant messages to numerous individuals, including traders at brokerage firms and hedge funds. The false rumor also was picked up by the media.

Creating a successful business is hard enough. The last thing you need is someone trying to make the case that you are going to fail at every turn. It is one thing to point out fraud like Theranos and NKLA, it is another thing to kick someone when they are down especially if your attack pushed the company into bankruptcy.

That comes with the territory of entering public markets though. If you don;t want to handle that kind of scrutiny, stay private and raise private equity or aim for a slower growth rate you can fund. Short sellers are good for the nature of the market they participate in.

>The last thing you need is someone trying to make the case that you are going to fail at every turn.

Isn't that called your mom for deciding not to become a doctor?

> Creating a successful business is hard enough. The last thing you need is someone trying to make the case that you are going to fail at every turn.

Funny how the business gets all the sympathy, here. Meanwhile, the stockholders--i.e. all of us--get screwed if a fraudulent company doesn't get exposed.

If a company goes public, the public has every right to scrutinize it and ensure they're above board. Short sellers play a critical role in providing that kind of scrutiny.

Companies can profit through abuse of an information imbalance. The short sellers have an economic incentive to look behind the curtain and find these abuses. They can provide a service to the market or,they can act unethically and put out false information.

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