Short selling is borrowing shares to sell at a high price and buying them back at a low price after the price has fallen. Profits is made by the differences in prices. According to an article by Bloomberg, short selling activists often ‘find targets that they allege have dodgy business or accounting practic-es, spread the word’ through the use of social media, and ‘if all goes as planned - watch the stock slump’(Kelley, 2016).
This is very similar to what Muddy Waters had done, except that the company had published a re-port instead of spreading the ‘bad news’ through other platforms. The short selling strategy had to be the reason why Muddy Waters published a report about Olam’s supposed ‘fraudulent accounting practices’. A report containing
This is very similar to what Muddy Waters had done, except that the company had published a re-port instead of spreading the ‘bad news’ through other platforms. The short selling strategy had to be the reason why Muddy Waters published a report about Olam’s supposed ‘fraudulent accounting practices’. A report containing