[ckdarby]

I don't know how this is not market manipulation.

Has anyone ever been contacted by these companies when they're doing their "research"? They're usually upfront negative about the company, "We believe this company to be a fraud. Con. Disrespectful and evil place.", then they spam every available ex-employee they can scrap from LinkedIn and then the subset that respond are the disgruntled burn the company to the ground kind.

I've seen even employees make factually incorrect statements about their employer because they didn't understand or they wanted to rumour spread.

[amenhotep]

That would be because market manipulation has a specific meaning and "saying bad things about a company" isn't it.

[rossdavidh]

Saying "this company is bad, we have a short in it" is not a new tactic, and is definitely not market manipulation according to the legal definition. Basically they are saying the market price is incorrect, and this is why they think so.

IANAL, but this is not a new tactic, and plenty of companies who are shorted would have challenged it if it were.

I mean, saying positive things about a company that you've bought shares in is essentially the same thing, and that happens all the time.