Disciplined Short Sellers Handbook (W/ 58 Highlights)
g at xny.io
Tue Nov 30 14:48:11 PST 2021
Does Short-selling Discipline Earnings Manipulation?
xNY.io recently collated international graduate scholar working notes
coining the "Crypto Computer Crimes Manual
(W/ 183 Highlights) as per best disclosure practices to illustrate various
potential scenarios when market conditions are met and a Board of Directors
potentially exploits blockchain technological software innovation with
forecastable reckless consequences.
The Disciplined Short Sellers Handbook serves as a Manual supplement ...
Detailing the hypothesis that short-selling has a disciplining role
vis-à-vis the managers forcing them to reduce earning manipulation.
Across 33 countries, the Handbook documents a significantly negative
relationship between lending supply and activism in the short sell market
and earnings manipulation.
Collectively, findings suggest that short selling provides an external
governance mechanism to discipline managerial incentives.
xNY.io highlights that the authors of the faculty and research study
confirm the main hypotheses and provide evidence of a beneficial effect of
the short-selling market on the corporate market. In other words,
short-selling generates a disciplining effect similar to the effect
produced by the contestability of the firm in the context of M&As.
In this regard, short selling contributes not only to the information
environment of the market but also to the contracting institutions of the
real economy. Suggesting that in general the disciplining role of
short-selling is the strongest for firms with weak internal governance or
less transparent information environments.
We share 58 highlights to the Handbook as a disclosure technique,
foreshadowing xNY.io's disciplined approach to trading in the near term
(subject to regulatory scrutiny):
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