John At The Center

These results suggest that, for the most part, at least, “short-sellers do not uncover and trade on information before it becomes publicly available,” the researchers wrote.

Furthermore, they found that in those cases when the timing of short-sellers’ trades did deviate from the timing of other types of trades, more often than not the short-sellers reacted later rather than earlier. In an interview, Professor Reed said that these results show that “short-sellers are primarily reactive rather than proactive,” and so it is “unfair to blame the average short-seller for engaging in so-called ‘distort and short’ schemes.”

via The Wisdom of the Short-Sellers – DealBook Blog – NYTimes.com.