Bear raid

A bear raid is a coordinated effort by a group of investors to short sell many shares of a company. When combined with a campaign of planted negative stories (such as rumors of financial difficulties), the intent is to trigger a major sell-off that drives down the price of a company’s stock, allowing the original group of short sellers to reap significant profits. A coordinated short selling campaign of this type is considered by the Securities and Exchange Commission to be market manipulation, and so is illegal. Also, spreading false rumors is classified as a fraudulent activity. Consequently, bear raids are illegal, but still occur when short sellers are careful to hide their activities from authorities.

Related Courses

Investor Relations Guidebook 
Public Company Accounting and Finance