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Short and Distort

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  • Joshua Mitts

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.

Suggested Citation

  • Joshua Mitts, 2020. "Short and Distort," The Journal of Legal Studies, University of Chicago Press, vol. 49(2), pages 287-334.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/711119
    DOI: 10.1086/711119
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