How to grapple with short sellers?

July 17, 2008 | By Jim Kim

Short sellers, who seemed so out-of-favor just a few years ago, have had a great run recently. There certainly have been plenty of targets. The Financial Times raises a timely issue: How do you deal with short sellers if you have been targeted? Lehman Brothers took the let's-talk approach when Greenlight Capital decided to take its famous short position. But then-CFO Erin Callan, who has since decamped for Credit Suisse, couldn't answer some questions to the satisfaction of David Einhorn. The rest is history. But what's the alternative? Hiding behind Reg FD? You ignore the shorts at your peril. Most would likely agree that dialog is the preferred route. Of course, you cannot prepare too much. If your answers are rock solid, you might find an audience willing to close its position and move on. If they still do not get it, good luck. The FT notes one targeted company, Kinder Morgan, put its detailed budget online and mocked the shorts. It worked.

For more:
- here's the Financial Times article