When investors don’t like a stock, they tend to stay away from it.
When investors despise a stock, they short it.
So what should an IR department do when the “short interest” in their company sky-rockets? In short (pardon the pun), the answer is to prove the Shorts wrong.
A recent example of this was IRIS Pharmaceuticals. Short interest in the company ballooned to more than 14% of the shares outstanding in mid-July. In early August the company reported that due to significantly improved financial performance they would be reducing their operating loss guidance by approximately $20 million. Not exactly music to the ears of those nasty Shorts. The stock reacted by gaining 30% from August 3rd to August 24th.
When pessimistic investors experience a short squeeze, it hurts.
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About Anil Dilawri
Anil is Director of Hill & Knowlton Canada’s Investor Relations group. He provides strategic counsel and leadership to publicly traded companies and/or organizations that are planning an initial public offering. His value is his ability to develop modern day investor relations strategies, policies and procedures to ensure that a company’s investor relations program is effective in meeting the needs of shareholders, prospective shareholders, financial media, company management, and the Board of Directors.
Anil has a vast amount of experience in communicating with members of the North American and European investment communities. This community includes sell-side analysts, buy-side shareholders, prospective institutional shareholders, retail shareholders, and financial media.
Before joining Hill & Knowlton Anil was the head of investor relations for March Networks Corporation where he was the strategic leader and day-to-day contact for a number of March Networks’ key stakeholders, including financial analysts, shareholders, media, and industry associations. Prior to March Networks Anil was at Cognos Corporation where he held several senior positions in investor relations, product marketing, and research and development.