Page 108 - CL Armchair Case
P. 108
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
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.
