When a short-seller has something unkind to say about a company, there is something a script the target follows. The short seller is engaged in “blatant market manipulation.” The usually very long and detailed report he wrote is “replete with misleading information and salacious accusations” and “inaccurate and unfounded.” “Full of ignorance, errors” and “false allegations leveled by outside detractors.” “Haters gonna hate.” All lies. Fake news. Nothing to see here. And then move on and hope things blow over.
But how do you know if any of them are telling the truth? Hell, Lordstown Motors CEO Steve Burns said one of those things, you know, right before getting canned for “issues regarding the accuracy of certain statements regarding the company’s pre-orders,” the very statements that short-seller Hindenburg Research called “largely fictitious”? How do you know whether they will, in fact, blow over? (In most of the above-linked cases, they very much did not.)
Well, here’s one (very slow and expensive) way to show you mean what you say.
Quinton Mathews, who published his research on companies online under the pseudonym Rota Fortunae, will pay Farmland Partners "a multiple" of the profits on his short bet in 2018, according to the terms of the legal settlement announced late on Sunday. His research had helped wipe as much as US$115 million (S$154 million) off Farmland's market value…. Mr Mathews conceded that "many of the key statements" in a report he published on website Seeking Alpha targeting Farmland - including allegations of dubious related-party transactions and the risk of insolvency - were wrong….
"It's highly unusual and refreshing to see a company take on this fight, because most will take the short-term blow of the attack without pursuing legal vindication," [attorney Jacob] Frenkel said…. Farmland's litigation against a hedge fund firm that paid Mr Mathews for research, Sabrepoint Capital Management, continues.
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