Shortseller Attacks: How Firms Bet on Stock Price Collapses
By Daniel Graf, 20 Minuten – May 2, 2026
When a company faces public pressure, its stock price can plummet. Certain investors, known as activist short sellers, capitalize on this by betting on the stock’s decline — often triggering it themselves through negative reports. This article offers insight into this controversial business.
What Are Short Sellers?
Short selling is a common stock market strategy that involves betting on the decline of a company’s stock price. A short seller borrows shares and immediately sells them at the current price. If the stock price falls, the short seller buys back the shares at the lower price, returns them to the lender, and pockets the difference.
Example:
- Borrow and sell 100 shares at CHF 100 each = CHF 10,000
- Stock price drops to CHF 70
- Buy back 100 shares at CHF 70 = CHF 7,000
- Gross profit before fees and interest = CHF 3,000
Who Are Activist Short Sellers?
Activist short sellers combine this strategy with the publication of negative reports accusing companies of fraud, financial manipulation, overvaluation, or dubious client relationships. Their goal is to spark media coverage, analyst scrutiny, and investor sell-offs, which drives the stock price down, resulting in profits for the short sellers.
Recent headlines such as “Short seller report: Partners Group under attack” or “Sportradar under pressure after short seller clash” exemplify this widespread phenomenon.
The Scale of the Industry
According to a 2025 report by law firm Vinson & Elkins, there were 151 activist short selling attacks on U.S. companies, up from 122 in 2024. While the total profits activists generate from these attacks are undisclosed, the rising number of incidents demonstrates an expanding business sector.
Is This Practice Legal?
Short selling itself is legal and represents a significant segment of the market. Lenders of securities benefit as well, earning billions from lending their shares. However, legality is compromised when market manipulation, misinformation, or insider trading is proven. The U.S. Securities and Exchange Commission (SEC) explicitly states that most short selling is lawful, while manipulative practices are illegal.
Conclusion
Activist short sellers operate in a gray area of the financial market—legally betting against companies while potentially destabilizing them through strategic negative publicity. Investors, companies, and regulators continue to navigate the complex implications of this controversial investment tactic.
Daniel Graf has been working for 20 Minuten since 2020. He is head of the News, Economy & Video Reporting department and since September 2023 a member of the editorial management team.