Strategic Resilience: A Proactive Guide for Companies Facing Short Seller Attacks
In a highly volatile market, short seller attacks remain a significant threat to publicly traded companies. Although they are becoming less common, declining from more than 200 in 2015 to around 100 such attacks in 2022, the impact of these attacks has arguably increased, particularly for larger, more established organizations. The basic construct of a campaign, however, remains the same: Publish a short thesis on a company — be it in a report, post or blog — to encourage its shareholders to sell their stock, which creates downward pressure on the price. With the intent to profit from the destruction of value, anything and everything is fair game, including putting the credibility of the company and management into question.
Short seller attacks are nearly impossible to predict, and organizations are often afforded limited time to assess the situation and respond accordingly. But by adopting a strategic approach, proactively assessing a stock’s vulnerabilities and developing a response playbook, CEOs, boards of directors and management teams can strengthen their organization’s resilience when confronted with this type of crisis.
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