📉 Short Sellers: How They Attack, Fail, and Sometimes Win
Short sellers love to target high-flying stocks, hoping to profit from panic. But more often than not, their attacks fail spectacularly—especially when companies respond swiftly and effectively.
Take Applovin (APP), for example. In one day, it faced three separate short reports. Instead of crumbling, it shut them down instantly—proving that the right reaction can make all the difference.
🚀 Short Sellers Go After High Flyers (And Usually Miss)
Their usual strategy:
✔️ Find a soaring stock. (Think Enron, SMCI, Applovin, FTAI)
✔️ Release a negative report. (Allegations of fraud, overvaluation, shady accounting—anything to instill fear.)
✔️ Profit when the stock tanks.
But they don’t always win—and lately, they’re losing more than they’re winning.
Everything depends on how fast and accurately a company responds. Applovin crushed three short sellers in a day by reacting swiftly, proving that companies can flip the script if they play it right.
💀 When Do Short Sellers Actually Succeed?
Sometimes, they get it right—especially when they have a whistleblower revealing dirt that regulators ignore. If a company is actually a fraud (like Nikola or Luckin Coffee), it’s game over.
The key difference? If a company can fight back, it usually wins.
🔻 The Most Notorious Short Seller Battles
⚔️ Bill Ackman vs. Herbalife – The $1 Billion Bet
• The Attack: In December 2012, billionaire investor Bill Ackman announced a $1 billion short position against Herbalife Ltd. (HLF), calling it a pyramid scheme and predicting its stock would go to zero.
• Stock Impact: Initially, Herbalife’s stock dipped but then rebounded and surged, forcing Ackman to defend his position for years.
• The Retraction: After nearly five years, Ackman closed his short position in 2017, reportedly incurring massive losses.
• Aftermath: By February 2024, Herbalife’s stock had dropped 32% to a 14-year low, which Ackman later called a “psychological short victory.”
✔️ Final Score: Herbalife Wins – Ackman Forced to Exit
💀 Hindenburg Research vs. Nikola – Exposing the ‘Rolling Truck’ Fraud
• The Attack: In September 2020, Hindenburg Research accused Nikola Corporation (NKLA) of being an “intricate fraud,” alleging that the company faked its EV truck demo.
• Stock Impact: Nikola’s stock plunged 40%, and CEO Trevor Milton resigned within days.
• The Downfall: The fraud led to investigations, and by February 2025, Nikola declared bankruptcy, with its stock trading at just $0.18—down 99% from its peak.
✔️ Final Score: Hindenburg Scores a Total Knockout
⚡ Hindenburg Research vs. Adani Group – The $100 Billion Bloodbath
• The Attack: In January 2023, Hindenburg accused India’s Adani Group of stock manipulation and accounting fraud.
• Stock Impact: The report triggered a $100 billion wipeout in Adani’s market value.
• Recovery: Over time, Adani secured funding, won back investor trust, and fully recovered. However, in November 2024, U.S. prosecutors indicted Gautam Adani and other executives for allegedly orchestrating a $265 million bribery scheme to secure solar energy contracts, further complicating the conglomerate’s challenges.
✔️ Final Score: Adani Takes the Hit but Faces Ongoing Legal Battles
📈 Hindenburg Research vs. SMCI – A Resilient Rebound
• The Attack: In mid-2024, Hindenburg targeted Super Micro Computer Inc. (SMCI), claiming financial manipulation.
• Stock Impact: The stock fell 25% in the immediate panic.
• Recovery: Within months, SMCI rebounded to new highs, proving the short thesis was weak.
✔️ Final Score: SMCI Shakes It Off – Hindenburg Misses
🎮 Hindenburg Research vs. Roblox – Gaming the System
• The Attack: In late 2024, Hindenburg released a report accusing Roblox Corporation (RBLX) of inflated user metrics.
• Stock Impact: The stock fell 15% on release of the report.
• Recovery: Roblox bounced back, as user engagement and revenue remained strong.
✔️ Final Score: Roblox Recovers – Hindenburg Fails to Kill It
✈️ Muddy Waters vs. FTAI – A Turbulent Ride
• The Attack: In early 2025, Muddy Waters claimed FTAI Aviation Ltd. (FTAI) was manipulating financials.
• Stock Impact: The stock dropped 20% on panic selling.
• Recovery: FTAI provided financial transparency, proving Muddy Waters wrong, and the stock fully recovered.
✔️ Final Score: FTAI Survives the Short Attack
📊 Short Seller Hit List: Who Got Hit, How Hard, and Who Fought Back?
🛑 The Takeaway: Short Seller Panic = Opportunity?
🔸 Not every short attack is a death sentence. Stocks like SMCI, Roblox, and FTAI bounced back fast.
🔸 A fast, strong response can crush a short report before it does real damage.
🔸 If a company is an actual fraud (Nikola, Luckin Coffee), short sellers will win.
Who do YOU think is the GOAT short seller? And which stock will be the next target-or the next comeback story?
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