Go Down Fighting: Short Sellers vs. Firms
Working Paper 10659
I study battles between short sellers and firms. Firms use a variety of methods to impede short selling, including legal threats, investigations, lawsuits, and various technical actions intended to create a short squeeze. These actions create short sale constraints. Consistent with the hypothesis that short sale constraints allow stocks to be overpriced, firms taking anti-shorting actions have in the subsequent year very low abnormal returns of about -2 percent per month.
O. A. Lamont, 2012. "Go Down Fighting: Short Sellers vs. Firms," Review of Asset Pricing Studies, vol 2(1), pages 1-30.