“Why is there so much short interest in my stock?” Many executives find themselves asking this question, especially when it seems things are going well. Stocks have been “shorted” for many years now, but there is no doubt that the practice has seen much wider use – and brought about more management frustration – in recent years. Doesn’t short selling expose funds to unlimited losses? Why do investors take the risk?
Much like with negative analysts, the most tempting answer – and biggest misconception – is to believe it is personal. It might be true that your short investors don’t like you. But that is not the reason they put in that short order.