Insightful FT Alphaville post on short reports (“activist short selling”).
It builds on a recent paper where “two academics studied corporate responses to 351 short-reports published on US-listed companies between 1996 to 2018 in an attempt to discover if a company’s reaction is as important as the market’s when a report is released.”
It seems that companies that launch internal investigations as a response have the worst outcomes – 383% higher chance it is a fraud.
