For readers of Money Stuff who haven't paid much attention to the Luckin Coffee controversy yet, this anonymous white paper makes fascinating reading.
February: "But that is an anonymous paper, published by someone who has no obvious claim to being an expert on the Chinese coffee market, who likely has a conflict of interest. Why assume it has non-zero truth value?"
April: "... Oh."
April: "... Oh."
Sometimes I envy short sellers. Is there any purer application of "My job is winning arguments on the Internet" than "The newspapers reprint press releases and in the short run the market is a voting machine. You're all wrong. So wrong. Can I borrow your shares? Will return at 0"
Unsurprisingly, articles about short sellers generally focus on motivations, opposing quotes from company, insinuations that if they're wrong they're frauds and if they're right the enterprise is unseemly, etc etc, and rarely "Kinda like this newspaper but paid for accuracy."
(It's a bit more complicated than "paid for accuracy" because markets are complex and you have to be *much* more accurate than the current market consensus *and also* good at the mechanics of putting on the short to have sufficient profits to cover costs of the operation.)
(Which is one reason why it's much, much more attractive as a short seller to say "Oh I think that multi-billion dollar enterprise is a straight up fraud and that all senior management is going to jail" than "Wow the consensus overvalues same store sales growth by ~10%.")
