You Can't Control Short Sellers, But You Can Control What You Do About Them
Carl Icahn is famous on Wall Street for taking big positions in companies in an effort to influence the business decisions their management teams make. In a bit of a twist, short-seller Hindenburg Research targeted Icahn's public company, Icahn Enterprises (NASDAQ: IEP). This episode provides some light on what investors should do when short sellers pop up.
Essentially, a short seller is looking to benefit from a drop in a stock's price. There are any number of reasons for expecting a stock's price to fall, from an extremely high valuation to company-specific issues that are expected to result in poor stock performance. In its most basic form, a short sale involves borrowing stock from a broker and selling it in the hope that it can be repurchased at a lower price later and returned to the broker. The profit is the difference between the sale price and the purchase price.
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Source Fool.com
