Weird question - would a hedge fund ever go short on a stock to keep price down...

CocaColaKid said:
...while building a long position?


Not even sure the question really makes sense, but not familiar with all the ways shorts are used. I've seen a weird short by Voleon, on a stock which is about to release a stream of sales and partnerships news. Really looks like it will be pretty big over the next few months.

Either way it's a pretty risky stock to short, has too much cash coming in and growing monthly. Now I've noticed a hedge fund recently started shorting it and even increased the short yesterday as the price got higher.

I know why many shorts are taken out - bad company, likely to have share price fall, or hedging generally in a market with a long/short strategy. But what about shorting companies that look to have excellent short to medium term growth. Why not wait for those to really max out their share price, then go short. What tactical reasons could there to use a short?
More...

no. But they might say things to convince YOU to short it to keep the stock price down
 
Alright, what about they know who the large holders are and are expecting a sell off from one of them. That on top of the current low volume could be enough to get a bear raid going or a temporary pull back at least?

You could work out when funds will sell off as the position size has growth beyond their risk profile. Or maybe you have a tip off from a broker, that there's a large sell order from an institution going around.
 
One more!

What if they knew or even thought an acquisition was about to happen. Even had a tip off?

I did some checking into this hedge fund, back in 2015 they opened a short on a pharma company and started a big selloff. Stock bounced back fast over a couple of days then the takeover was announced. Stock rose 40% again before it was taken off the market that day.

ZS Pharma it was called.

Looking back at it now, just seems a bit too manipulated.
 
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