Short Sellers Lament

By Douglas A. McIntyre Published Dec 5, 1:39PM EST

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Normally public company’s complain about short sellers trying to take their stocks down, spread rumors, and doing naked shorting (where the shares are never borrowed at all). Operations like Overstock seem to complain about short selling almost once a day.

Now, short selling firms are whining in open court. Two short selling firms have sued 13 investment banks like Morgan Stanley and Goldman Sachs for fixing prices on the fees for the borrowed shares. In particular, the complaint says that the short sellers were overcharged for "hard to borrow" shares. That would be an antitrust claim.

But, what if the shares are hard to borrow. Not all companies have huge floats or trade 10 million shares a day. Should the fees be fixed without any elasticity when the degree of difficulty may vary from stock to stock?

An odd claim from firms that bet that stock prices will drop. But, with the markets up, they may not have anything else to do.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.