Go Down Fighting: Short Seller vs. Firms

50 Pages Posted: 20 Jul 2004

See all articles by Owen A. Lamont

Owen A. Lamont

Harvard University - Department of Economics

Date Written: July 14, 2004

Abstract

I study battles between short sellers and firms. Firms use a variety of methods to impede short selling, including legal threats, investigations, lawsuits, and various technical actions intended to create a short squeeze. These actions create short sale constraints. Consistent with the hypothesis that short sale constraints allow stocks to be overpriced, firms taking anti-shorting actions have in the subsequent year very low abnormal returns of about -2 percent per month.

Keywords: mispricing, short selling, short-sale constraints

JEL Classification: G14

Suggested Citation

Lamont, Owen A., Go Down Fighting: Short Seller vs. Firms (July 14, 2004). Yale ICF Working Paper No. 04-20. Available at SSRN: https://ssrn.com/abstract=566901

Owen A. Lamont (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

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