Selling short is a hard nosed game.
Last week the New York Times reported that Lululemon’s VitaSea clothing line wasn’t all it was cracked up to be. Turns out the New York Times was tipped off by a short seller of Lululemon stock.
Here was Lululemon's response.
The IR lesson - when a stock isn’t going in the desired direction for an aggressive short seller, then beware…things could get messy. Unsubstantiated rumors will surface, pessimistic sentiment will mysteriously show up, and unflattering media reports will appear.
Was the news worth an 8% haircut in Lulu’s stock price the morning the news broke? You wouldn’t think so, but that’s what happened last Wednesday morning. The stock rebounded handsomely that day but it now trades almost 17% below its closing price of 7 days ago.
It’s a dog eat dog world out there, and short sellers leave very few stones unturned.
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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.