9/15/2020 Bear raid - Wikipedia

Bear raid
A bear raid is a type of stock market strategy, where a trader (or group of traders) attempts to force
down the price of a stock to cover a short position. The name is derived from the common use of bear
or bearish in the language of market sentiment to reflect the idea that investors expect downward
price movement.[1]

A bear raid can be done by spreading negative rumors about the target firm,[2] which puts downward
pressure on the share price. This is typically considered a form of securities fraud. Alternatively,
traders could take on large short positions themselves, manipulating the price with the large volume
of selling,[3] making the strategy self-perpetuating.

History
The practice of bear raid has its roots in the 17th-century Dutch
Republic. In 1609, Isaac Le Maire, a sizeable shareholder of the
Dutch East India Company (VOC), organized a bear raid on the
stock of the company.[4]

See also
Uptick rule
Market manipulation

References
1. Law, Jonathan, ed. (2008). A dictionary of finance and
banking (https://books.google.com/books?id=9SaLP0be02sC
&pg=PA42) (4th ed.). Oxford: Oxford University Press.
ISBN 9780199229741. Retrieved 22 November 2014.
2. Malik, Andrew; Sarna, David E.Y. (2010). History of Greed Replica of an East Indiaman of the
Financial Fraud from Tulip Mania to Bernie Madoff (https://bo Dutch East India Company/United
oks.google.com/books?id=KxMnRJ0-__UC&pg=PT62).
East Indies Company (VOC).
Hoboken: John Wiley & Sons. p. 62. ISBN 9780470877708.
Retrieved 22 November 2014.
3. Scott, David L. (2003). Wall Street words : an A to Z guide to investment terms for today's
investor (https://books.google.com/books?id=7hsXI8_zwoEC&pg=PA28) (3rd ed., newly revised
and updated. ed.). Boston: Houghton Mifflin. p. 28. ISBN 0618176519. Retrieved 22 November
2014.
4. Sayle, Murray (2001-04-05). "Japan goes Dutch" (http://www.lrb.co.uk/v23/n07/murray-sayle/japa
n-goes-dutch). London Review of Books. 23 (7): 3–7. ISSN 0260-9592 (https://www.worldcat.org/i
ssn/0260-9592). Retrieved 2017-11-01. "...Dutch market punters pioneered short selling, option
trading, debt-equity swaps, merchant banking, unit trusts and other speculative instruments,
much as we now know them. With them came specialised offshoots – insurance, retirement funds
and other orderly forms of investment – and the maladies of capitalism: the boom-bust cycle, the
world's first asset-inflation bubble, the tulip mania of 1636-37, and even, in 1607, history's first
bear raider, a canny shareholder named Isaac le Maire who dumped his VOC stock, forcing the
price down, and then bought it back at a discount."

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