Oh this is funny! Hedge funds being dosed with their own medicine.

Let me summarize the matter: short selling is when you sell shares of a company that you don't own AT THIS POINT. Wait, what? Yeah, that can be done. As long as you buy the shares you sold later. Its complicated. Read here. So why do it? Because if you have some information about the company that indicates that the share prices are going to tumble tomorrow, then short sell today at high prices, and buy back tomorrow after the prices have dropped. That gives one a big profit. Hedge funds like to do this. That is why insider information is important. Also shady. Well, hedge funds and pirates frequently like to get together to drive prices down on a company. In that case, short selling will also garner massive profits. Also in the process devaluing the company and perhaps putting it through the wringer, but what do brokers care?

This week, hedge funds in NY and London tried pulling this on VW. Making it, for a short while, the largest capitalized company in the world. Except that it did not work. Thanks to VW, and also thanks to Porsche, a major shareholder. Read on here.