Page 22 - Martin Shkreli Case Study
P. 22
Shorting the Stock
To short a stock, an investor
borrows it from someone who is
long. To cover the short position,
the investor must buy the shares
back. The bet is that the stock will
fall in price, allowing the short seller to buy it back at a lower price, and
then pocket the difference. But if the share price instead rises the short
seller is left facing unlimited losses.
PUMP & DUMP
Diagram 2
Some investors engage in pump and dump of Penny Shares by
influencing the attractiveness of the share to boost its price and then
dumping their holding resulting in its collapse.
