Lawyers
Corporate partner Carmen Lu was quoted in a Diligent Market Intelligence article, “After the Short,” about the ways in which companies react to a short campaign. Some companies respond by announcing a share repurchase, but Carmen cautions that buybacks should not necessarily be seen as a direct reaction to what is usually a brief activist campaign. “Short seller campaigns are usually very short-lived, often only lasting a few days and rarely more than a week,” Carmen says. “They typically don’t move the needle enough on their own to trigger those types of major corporate actions.” For short seller arguments that a company deems inconsequential, silence may be the preferred option. “More often than not, companies don’t say anything,” Carmen says, although reports alleging material misstatements or fraud carry greater risk and may force a response.
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