ABSTRACT
Pseudonymous attacks on public companies are followed by stock price declines and sharp reversals. These patterns are likely driven by manipulative stock options trading by pseudonymous authors. Among 1,720 pseudonymous attacks on mid- and large-cap firms from 2010 to 2017, I identify over $20.1 billion in mispricing. Reputation theory suggests these reversals persist because pseudonymity allows manipulators to switch identities without accountability.
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Joshua Mitts, Short and Distort, Journal of Legal Studies Volume 49, Number 2, June 2020, https://doi.org/10.1086/711119.
First posted 2021-02-07 18:59:20
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