Anatomy of a Short Attack (


“When a lengthy “short” report is published, a company’s stock price will almost often experience a near-term drop as momentum traders react to the allegations. Billions of dollars can hang in the balance as investors sift through a densely written report posted on a website. In some cases, the publication will set off an extended battle in the media between corporate executives, short-sellers, and large investors that can last for weeks or even months.

Equally important to the company’s ultimate fate is the drama playing out “behind the curtains.” Actors including internal auditors, the independent accounting firm, the audit committee, regulators, and large shareholders seek to assess the veracity of the charges and see if they missed something of significant magnitude. The results of this frenzy of activity will often determine if the attack ends up as a minor footnote or a company- and career-ending debacle.” – Drew Bernstein, Marcum Bernstein & Pinchuk


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