MICHEL PIREU: Short sellers are not solely to blame for corporate disasters
Often accused of market manipulation, short sellers identify financial misrepresentation and help dampen over-enthusiasm
In 1609 a merchant contracted to sell shares in the Dutch East India Company at a future date, sending the company’s share price into a plunge. A year later the authorities imposed the world’s first ban on short selling.
Short sellers, or “shorts”, have been blamed for almost every financial crisis in the 400 plus years since the Dutch episode. Shorts came under fire after the US stock market crash of 1929, shorts were blamed for the US stock market crash of October 1987 and shorts were blamed for the collapse of Lehman Brothers in 2008...