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Short and Distort

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  • Joshua Mitts

Abstract

Pseudonymous attacks on public companies are followed by stock price declines and sharp reversals. These patterns are likely driven by manipulative stock options trading by pseudonymous authors. Among 1,720 pseudonymous attacks on mid- and large-cap firms from 2010 to 2017, I identify over $20.1 billion in mispricing. Reputation theory suggests these reversals persist because pseudonymity allows manipulators to switch identities without accountability.

Suggested Citation

  • Joshua Mitts, 2020. "Short and Distort," The Journal of Legal Studies, University of Chicago Press, vol. 49(2), pages 287-334.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/711119
    DOI: 10.1086/711119
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    References listed on IDEAS

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    Cited by:

    1. Jinzhi Lu & Pingyang Gao, 2024. "Short, Disclose, and Distort," Papers 2404.07630, arXiv.org.
    2. Bloomfield, Matthew J. & Heinle, Mirko & Timmermans, Oscar, 2024. "Relative performance evaluation and strategic peer-harming disclosures," LSE Research Online Documents on Economics 122509, London School of Economics and Political Science, LSE Library.
    3. Farrell, Michael & Green, T. Clifton & Jame, Russell & Markov, Stanimir, 2022. "The democratization of investment research and the informativeness of retail investor trading," Journal of Financial Economics, Elsevier, vol. 145(2), pages 616-641.

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