The emperor's new valuation

Short-sellers have a role to play in market processes - but it is regulators that really make markets move

Mihir S Sharma

Illustration: Ajay Mohanty

Everyone has heard the story of the emperor’s new clothes. Modern shareholder capitalism is built around the principle that those who call out emperors for having no clothes should profit from the effort. Bears and short-sellers are essential to the function of markets; they keep valuations from getting out of hand.
That does not mean anyone likes them. Bulls can be lying through their teeth, be invested in the companies they talk up, could in fact be spouting complete and provable nonsense, but they will still be platformed on television and given a warm reception on social media. Bears will be decried as insufficiently nationalistic; short-sellers as malign and evil. This duality is absurd; both sides, after all, seek to make money by predicting the future, and if they do their jobs properly then their advice helps other people make or save money as well.
An extreme case of this absurd discourse was on display recently aft
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Jan 29 2023 | 9:52 PM IST

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