Why Don't Hedge Funds Publish Research to Pump Stocks?
Forgive me if I am a novice. I know there are only a handful of HF that can actually move the market in any particular name, but why wouldn't they try to publicize their views to bring attention to the situation? Recent examples of this would be Pershing Square and Hertz, Elliott and Phillips 66 (but activism is obviously publicized by nature). I'd like to think a fund on the rise would do itself a favor by putting out brief write-ups on Twitter or their website.
Most stocks are too liquid for that to work. But to some extent they do by sharing memos around.
pretty sure pump n dump is a sec violation under market manipulation
altho not any worse than insider trading which all of US congress engages in
I don't mean pump and dump, but just releasing reports on the merits of a given business (e.g., why we like it, where we think the stock is headed, catalysts). Seems like this would be a good way for smaller funds to gain traction beyond personal relationships with wealthy families and individuals.
They'll sometimes do the inverse, talk names they want to drive volume to when they're looking to exit. That's why shows like Cramer's exist.
They regularly talk up their ideas to industry peers, idea dinners, sell-side, valueinvestorsclub - since it’s really institutions that can move a stock. That said - unless you have a reputation for really high quality ideas and people won’t listen
On the short side - they regularly pitch short activists ideas or peers similar to above, but there are a lot of downsides to publicity - other funds or a retail job might try to squeeze you and there tends to be a contingent of fanboys around any successful fraud who will tattle to management or in the case of retail, form wild mob conspiracy theories and harass your family cause ‘ShOrTiNg EviL’ and the moral world is unbalanced unless every stock goes up
see Ackman, Bill
You mean buying SPYs max levered when Bill goes on CNBC crying?
Not the 90s or early 2000s anymore. Something something laws. I’m half joking.
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