You don't even have to trade the stock you attack publicly. You could trade a highly correlated stock. Maybe you wouldn't make quite as much, but you would be much harder to find.
Great point. Bloomberg's Matt Levine has been referenced elsewhere in this discussion, but he had this exact point [1] in today's newsletter regarding market reactions to COVID vaccine news:
"Signs of progress toward a coronavirus vaccine by Moderna propelled most corners of the stock market higher. … Most of the gains followed the release of a new study suggesting Moderna had reached a breakthrough with its coronavirus vaccine, setting the stage for a larger trial at the end of this month. Cruise-ship operators, airliners and other stocks sensitive to the coronavirus crisis led the stock market higher. Shares of Moderna rose $5.18, or 6.9%, to $80.22.
Royal Caribbean Cruises Ltd. was up 21.2%. Norwegian Cruise Line Holdings Ltd. was up 20.7%. Carnival Corp. was up 16.2%. American Airlines Group Inc. was also up 16.2%. United Airlines Holdings was up 14.6%. The biggest gainers were the vaccine-sensitive industries, not Moderna itself."
"Signs of progress toward a coronavirus vaccine by Moderna propelled most corners of the stock market higher. … Most of the gains followed the release of a new study suggesting Moderna had reached a breakthrough with its coronavirus vaccine, setting the stage for a larger trial at the end of this month. Cruise-ship operators, airliners and other stocks sensitive to the coronavirus crisis led the stock market higher. Shares of Moderna rose $5.18, or 6.9%, to $80.22.
Royal Caribbean Cruises Ltd. was up 21.2%. Norwegian Cruise Line Holdings Ltd. was up 20.7%. Carnival Corp. was up 16.2%. American Airlines Group Inc. was also up 16.2%. United Airlines Holdings was up 14.6%. The biggest gainers were the vaccine-sensitive industries, not Moderna itself."
[1] https://www.bloomberg.com/opinion/articles/2020-07-16/a-vacc...