OLD Media Moves

Has the SEC's war on shorts hurt business journalists?

July 24, 2008

Ryan Chittum of Columbia Journalism Review wonders if the Securities and Exchange Commission‘s war on short sellers spreading rumors has hurt business journalists, and quotes one business reporter who recently tried to call a well-known short and couldn’t get him on the phone.

Short sellingChittum writes, “This is, of course, very true. Business reporters are bombarded by ‘longs’ and touts all the time. Contrarian sources are invaluable in helping journalists break through the flacky haze by pointing out problems the companies are papering over.

“But as I wrote in the Opening Bell this morning, I’d like to see more coverage of whether the SEC’s move has caused a ‘short squeeze’, where investors who have shorted stocks scramble to cover their bets by buying shares, sending a stock soaring.

“In the five days since the SEC’s announcement, financials have rallied 31 percent, The Wall Street Journal reported today, without noting the SEC connection.”

Read more here.

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