Wow, when companies complain about short sellers, it's generally pretty dumb (and a sell signal), but this sounds like MS was trying to help people get around lockup agreements which is pretty bad behavior if true.
For someone who knows nothing about shares, why is it a sell signal? I'd always assumed the issue was just that it was juvenile, not necessarily a cause for concern.
Because short sellers increase liquidity, and help the market determine an accurate price for the company.
Also short selling is far more risky than taking the long side. On the long side, your downside is the money you invested (if the price goes to zero). On the short side, your downside is infinite (if the price keeps going up).
Shorters also apply downward pressure that might not exist naturally, since they're selling borrowed stock. AFAIK they could potentially short more stock than is even issued by the company. It's understandable why some companies would be irritated by people doing that.
You are talking about naked short selling. I think except by a few vocal opponents (e.g., Overstock CEO) generally naked short selling is not considered a major concern in the market as Long as it is not abusive.
Because strong companies don’t worry much about short sellers. You’ll never see Apple complain about them (and if they do you know Apple is having cash flow problems).
Companies complain about short sellers when they’re having cash flow problems and are dependent on the public markets to raise $ (by issuing new shares or in a bond offering), dto fund their operations. Short sellers can increase the cost of the company to raise money (eg if the company has a bond offering they may have to pay a higher interest rate if tons of shorts effectively lower the share price of the company).
So do you think lock up agreements themselves are a sell signal as well ? They threaten legal action on short selling (even worse than just complaining).