Markham Lee_

On Short-Sellers and Dishonest Executives

If the naked shorts are indeed using rumors and other illegal means to take down a company, then the root crime is market manipulation. Market manipulation in the form of lying executives, suspect accounting, etc, is no different from spreading lies to "take down a stock" (if indeed short-sellers are doing this). So people against the naked shorts should be against ALL market manipulators, instead of ignoring the ones that can cause stocks to go up.

Make sense?

The other issue is that lying executives know their companies are in trouble when they say things like: "We'll be profitable next quarter, don't need more capital, no more write downs, etc", while legal shorts are shorting companies that investors are dumping due to the companies being in trouble.

So who is the real menace?

-M

On Short-Sellers and Dishonest Executives

Tan and Jason,

First I'd like to thank you for reading my article.

Second, I'd like to point out that in no part of my article did I say anything positive about naked short-selling, or claim that I was in favor of it. In fact I clearly said that anyone in favor of fair markets should be against ALL ILLEGAL and/or UNETHICAL behavior, whether that includes naked shorts, false rumors or executives who blatantly lie about the state of their companies.

The article is more about people who rail against all short-sellers, while ignoring bigger threats from lying executives then it is about naked short-sellers. It was also about the fact that there is nothing inherently wrong with legal short-selling.

When having these discussions it's important to differentiate between naked short-selling and legal short-selling, as they're not one and the same.


-M