Thursday, March 23, 2023

Don't Blame the Short Sellers for the Fall of SVB

By Herb Greenberg

When people start blaming short sellers for the downfall of a company – or the world's woes – it's often the time to wonder why... It's a lazy and frequently wrong argument, but more often... it's a diversionary tactic. I learned that firsthand when I was a journalist, spending much of my time talking to short sellers... and getting my fair share of blame when stocks I wrote about went down. Almost always, those who screamed the loudest had the most to hide. I eventually co-founded two short-biased research firms. And for a very brief moment, I fancied myself becoming an activist short seller... before pulling the plug on that idea. What I learned was that, in general, successful shorts often did deeper, longer research... and picking an argument with them was foolhardy. They had a knack for sometimes finding things that were hiding in plain sight, but somehow were being ignored... Such as the financial risk at Silicon Valley Bank ("SVB"). That doesn't mean the shorts always get it

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