Earlier quoted context omitted.
> there are plenty of short sellers who would benefit from FB’s plummeting stock This is a weird meme that’s cropped up in tech circles over the past few years. It’s misleading and incorrect. No short selling fund sells short and then secretly seeds negative PR pieces. If you’re short, your argument is always strengthened by disclosing you put your money behind your words. Short sellers hire private investigators, co…
How can you be sure about this? Disclosing the existence of a short makes people doubt the bias in every piece of information you bring up. Keeping a position secret might be more effective than disclosing. I know when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility.
It’s not a hard and fast rule. Just one enforced by economic interests.
> when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility
You aren’t the target. Current shareholders are. Short-seller messaging is almost always primarily aimed at current long holders. (Since short sellers depend on long holders as a source for borrowed shares, a relationship which isn’t reciprocated in long holders needing short interest to make their investments work, inducing more shorts isn’t a feasible strategy.) The message shows bias from the position, but as an investor, someone betting on their message is more material than the bias. They decided, after all, to bet on the message before they themselves were biased.
(When long holders aren’t the target, regulators are. This was the Herbalife strategy. In those cases, too, a broad PR strategy is too expensive relative to the desired results.)