How to prevent a short attack.
Let me share my experience with you and see what can be done in case SIAF does become a victim of a short attack.
A. Before the attack
- Transparency is key. In the filings.
- Make sure you have strong shareholders who actually know a lot about the company. Because the worst thing that can happen is all of the institutions dumping your stock.
- A dividend, obviously.
- Have an emergency plan ready
B. After the attack
- Be proactive. Seek the help of the SEC. After all, the attack can only be succesful if market manipulation is involved. Meaning, a hedge fund will dump the stock on the very day that articles are published. That's illegal, and the SEC should be able to trace them. A lot of companies see the SEC as a burden. But when you are at war with the shorts, they are your friend. At least, they ought to be.
- Immediately increase the dividend. Perhaps make it quarterly.
- Immediately announce a share buyback program and actually DO the buying.
- Don't interact with the shorts but be responsive to the shareholders. Silence is deadly.
- Sue them.
- Again, transparency! Tell the shareholders as much as you can.
The good thing is, if anyone can do it, SIAF can. That much I know.
