If you are like 99% of investors and you buy stocks to see the share price increase, you have a distinct advantage over the short sellers; time and patience. Short sellers have to exit a rising stock quickly to minimize their losses and they will resort to a full bag of tricks (large blocks of shares offered below the current price, inflammatory press, scathing email campaigns, etc.) to hold the price down. Short sellers can also pick a stock with a big price spike, take a short position in that stock and then pull out their bag of tricks to drive the price down. A long investor just needs to recognize their tactics and wait them out. Oftentimes when we bail on a stock we invested in because of our due diligence, just because it starts to fall because of the short sellers we have played right into their hands. Wait them out and enjoy the profits created. (REPOST)
Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security. Manipulation can involve a number of techniques to affect the supply of, or demand for, a stock. They include: spreading false or misleading information about a company; improperly limiting the number of publicly-available shares; or rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security.Those who engage in manipulation are subject to various civil and criminal sanctions.
We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.
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