Paul Scott - STOCKOPEDIA - Shorting attacks8 Aug 2019 22:59
Shorting attacks generally - this brings me on to the issue of the morality, and legality of shorting dossiers. On the one hand, all shares should be subject to scrutiny. We don't get anywhere near enough negative commentary on companies, because the City is full of people (brokers, PRs, etc) who are paid to almost exclusively talk share prices up! Having some balance from bears is a good thing in principle, to help keep share prices grounded.
On the other hand, the technique of opening a short position, and then publishing an apparently explosive & damning negative report on a company, in order to make profit from triggering a (sometimes temporary) collapse in share price, doesn't seem right, does it?
My feeling is that short sellers should be required to submit such a dossier to the target company, and give them say 7-days to respond privately. This would allow companies to point out the mistakes in the draft report. It does appear that the MW report might have misinterpreted some of the cases it comments on. Or at least, Burford seems to have provided reasonable explanations in most cases.
The bottom line, is that if you attack a litigation specialist, expect to end up in Court, as I suspect is now looking rather likely here.
This kind of extreme volatility is really tough for private investors. Some might have stop losses in place, and others might have panic sold, and missed the bounce. You certainly don't expect such extreme volatility with a share valued in billions rather than millions.
No doubt we'll get a part 2 report from MW fairly soon, so the saga is likely to continue.
I've just signed in to the Burford conference call, should be interesting.
(about 45 mins later) I think management are coming across well on the conference call. They're giving full answers to some detailed questions. It all sounds open - subjectively, it doesn't feel like they're hiding anything, or making things up.
Director purchases - the CEO & CIO have both bought shares today at 663.77p pence per share, a total of 474,390 shares, costing £3.15m. To my mind, this type of orchestrated buying at a time of crisis, is largely irrelevant, as it's done for show.
There again, they're damned if they do, and damned if they don't.
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