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The inaugural seminar in the ECGI Spotlight Series took place on 13 July 2020. The series was introduced by the Chair of ECGI, Professor Lucrezia Reichlin and the Executive Director, Professor Marco Becht


Short sellers play an important role in the transmission of negative information into price. Because short selling leads to negative price pressure, short sellers have been cast as villains throughout history. Following the crash of 1929, for example, the U.S. Senate released the names of large short sellers in an attempt to brand them as “unpatriotic.” Perhaps because of this negative sentiment, investors are often reluctant to publicly disclose short positions.

Yet, recent years have seen a new phenomenon: high-profile short-selling campaigns by hedge funds. David Einhorn's short of Allied Capital provides an illustrative example. In May of 2002, Einhorn announced a short position in Allied at an investment conference, arguing the firm engaged in questionable accounting practices. Allied's stock price dropped by over 10% the following day, and by the next month its short interest increased sixfold.

In this study, the authors undertake a comprehensive analysis of short-selling campaigns by hedge funds, showing that, consistent with anecdotal evidence, the prevalence of campaigns has increased considerably in recent years. They also find that such campaigns are associated with abnormal returns for targets of approximately -7% as well as changes in the behaviour of stakeholders (e.g., other short sellers). Campaigns are primarily undertaken by activist hedge funds, particularly those that have more experience or employ hostile tactics.


The ECGI Spotlight Series is a global online seminar programme highlighting chosen papers from the ECGI Working Paper Series.

Spotlight Team:
Mike Burkart (Editor) | Miriam Schwartz-Ziv | Amir Licht (Editor) | Tom Vos

Supported by



Monday, 13 July 2020 | 16:00 CEST

Discussion and Q&A


Vyacheslav Fos

Professor of Finance and Hillenbrand Family Faculty Fellow
Boston College
Research Member

Nadya Malenko

Professor of Finance
Boston College, Carroll School of Management
Research Member

Alon Brav

Bratton Family Distinguished Professor
Fuqua School of Business
Research Member

Julian Franks

Professor of Finance
London Business School
Fellow, Research Member

Ronald Gilson

Charles J. Meyers Professor of Law and Business
Columbia Law School & Stanford Law School
Fellow, Research Member

Wei Jiang

Asa Griggs Candler Professor of Finance
Emory University Goizueta Business School
Research Member

Alexander Ljungqvist

Stefan Persson Family Professor of Entrepreneurial Finance
Stockholm School of Economics
Research Member

Mike Burkart

Professor of Finance
London School of Economics and Political Science
Fellow, Research Member

Marco Becht

Professor of Finance and the Goldschmidt Professor of Corporate Governance
Solvay Brussels School for Economics and Management, Université libre de Bruxelles
Fellow, Research Member

Lucrezia Reichlin

Professor of Economics
London Business School, Centre for Corporate Governance
Research Member


Spotlight Team
European Corporate Governance Institute (ECGI)
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