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Markets Now – Thursday 28th May 2020

Activist short sellers get a lot of flak. There are instances of short attacks helping bring down frauds, of course, but they are hugely outnumbered by situations where a company’s known or historic issues are hyped up for a new audience. There’s an argument to say that most investors don’t really benefit from a short seller publicising in shock-horror fashion a company’s questionable governance standards and murky accounting methods. It might be that wider attention forces the company to improve these things, but improvement is not really what the short-seller wants. Attacks are designed to put executives on the defensive. The whole gambit hangs on making the target embattled, not better.Congratulations, then, to Matt Earl’s Shadowfall for breaking the mould and helping cure its victim.

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Activist short sellers get a lot of flak. There are instances of short attacks helping

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