Two Examples Why You Should Never Underestimate Takeover Rumors

People love shorting strong stocks that are up on takeover rumors. They reason “these companies are blah blah blah” and “their businesses are blah blah blah”. I won’t use any examples because the details are quite inconsequential, it’s the same pattern again and again. No matter how good or bad a company is, how full of BullShip the management is (good!)(for shareholders) or bad they are (meaning they’re idiots or they tell the truth)(first one is common, second, extremely rare, aka never, but if it did happen, it’d be bad for shareholders because the truth is ugly), the industry, the potential, the hot tip your roommate/coworker/mistress tells you about the play, whatever, these rumors may turn out to be true. So, what are short sellers doing—they’re playing the classic Wall Street guessing game. Right or wrong, they give short sellers a bad name. I want no part of it. Let me explain.  

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