Management needs to seriously consider the downside of blaming short sellers (real or fabricated) for poor stock performance.
Sure, it may successfully rally some believers to your cause and pump up the stock price, but the effect is most definitely temporary, and such claims will often do the stock, and the management personally, much more harm than good.
Any short-squeeze, even a real one, doesn’t last. And it certainly doesn’t do anything to change the underlying fundamentals of the company. Even if there is a buying frenzy, what the company is left with is a lot of unhappy and very short-term minded shareholders who bought in on the promise of quick profits that didn’t materialize. They don’t do much to build a successful and stable company long-term, as they will likely be looking to bail out at the first opportunity.
From a regulatory perspective, trumpeting a short squeeze just got a lot more problematic. The recently SEC action against the officers of Torchlight/MMTLP for pumping up the stock price through trying to orchestrate, and them promoting, a short-squeeze which they used to sell stock should cause public companies to think twice about utilizing this strategy.
If you are an officer or director of a company, railing at the short sellers, even if they are real, can bring you a bad reputation. Investors will begin to think of you as fixated on the stock market and not the underlying business at best. At worst, a market manipulator who is not serious about building a business. Either way, it will seriously damage their ability to raise funds, and is not productive for long-term success.
Short-selling is just a fact of life. It happens. There will always be investors that don’t like your stock for whatever reason, real or imagined. Management shouldn’t be focused on the shorts and spending significant time going to war against them. Instead, they should be focused on building and growing their business and establishing positive long-term relationships with shareholders. #capitalmarkets #nasdaq #otc
Program Manager at Georgia Tech's Center for Composites and Hybrid Materials Interfacing, Academic Professional at School of Materials Science, Materials Innovations -Titleist Golf Ball and Intellectual Property - APSLAW
1moAmazing accomplishments by Team Sila Nanotechnologies. Huge kudos to their relentlessly hardworking Leadership Team! Best wishes for many more accomplishments ahead.