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@StarfishUltra"There is no lie so incredibly untrue, that at least some people will accept it as fact." Said by the CEO of NAB during the GFC. Thereafter, in response to
blatant market manipulation of bank shares, the ASX suspended short selling of these companies.
Whilst corporations are held to the highest disclosure and reporting standards, the social media downrampers are held to
none. In addition, BOTS / algos can be effective weapons in the market manipulation of a share price. The ASX needs to wake and and smell the coffee! They are essentially condoning short attacks by their inaction, and and thus failing to protect investors and companies from these type of campaigns. Unfortunately, in some instances 'professional short reports' have highlighted where company valuations were completely unjustified, and where companies had mislead the market. I say unfortunately, because it just gives credibility to basically ANY short attack! Whilst shorting per se is not necessarily a bad thing, the practice can be 'weaponized', and companies can be powerless to stop these fraudulent attacks. Don't misinterpret me, individuals are free to express negative
opinions on stocks e.g. "I believe the current market cap. can't be justified." I'd be the first to say that about Tesla!
But non-factual, misleading, deceptive, and untrue statements used to create fear and panic are simply not acceptable. The ASX needs to level the playing field and protect investors. Naturally, they can't control what is said on social media. However, they could grant companies 'short protection' by
temporarily suspending short selling where companies could demonstrate evidence of fraudulent campaigns. This would afford companies time to respond to claims and halt downward momentum. This alone would likely send retail shorters into a mad panic to cover. With the knowledge that a
short campaign could be halted at any given moment, these
targeted campaigns would likely largely disappear (but not of course shorting in general).
Notwithstanding the above, let's not give too much credit to these social media 'manipulators'. IMO all they do is essentially just exacerbate Institutional short selling pressure. But this feeds downward momentum and it can have a snowball effect.
The ASX / ASIC believe that shorting is an effective mechanism for price discovery, and perhaps that is indeed true. But just like investors should be protected from companies making misleading and unsubstantiated claims, so too should they and the companies, be protected from the same behaviour by third parties.
Having said all that, its naïve to think that the ASX / ASIC will intervene and take any meaningful action. As such, investors need to become more informed and do their own research. Lambs get slaughtered, so don't be a sheep! Do thorough research and invest with a long term time horizon. If you're selling shares because someone on social media posted something negative, you probably should invest in property. It is also important to remember that shorts can provide you with a maximum 100% gain. Long returns in this company dwarf those returns, so it's pretty obvious who wins
the most in the long run.
N.B."Never argue with an idiot, they just drag you down to their level and beat you with experience"Good luck to all '
Investors'!
(20min delay)