Hongqi Liu, Nan Xu, Jianming Ye, 02 June 2015
This paper studies short sellers’ trading strategies and their effects on the financial market by examining their accusations of fraud against Chinese reverse merger firms (CRMs) in the US. We find that short sellers rely on firms’ fundamental information, especially relative financial indicators, to locate their “prey.” Specifically, they compare a target firm’s financial indicators (e.g., growth and receivables) with both the industry average and the firm’s history. Continue reading “Article: Short sellers’ accusations against Chinese reverse mergers: Information analytics or guilt by association?”
