Bear raid definition
/What is a Bear Raid?
A bear raid is a coordinated effort by a group of investors to short sell many shares of a company. When combined with a campaign of planting negative stories (such as rumors of financial difficulties) on social media and online message boards, the intent is to trigger a major sell-off that drives down the price of a company’s shares, allowing the original group of short sellers to buy back shares at a low price, thereby reaping significant profits . Bear raids are most commonly targeted at companies that have been reporting declining results, so that the investment community will be more likely to believe the false rumors.
A coordinated short selling campaign of this type is considered by the Securities and Exchange Commission to be market manipulation, and so is illegal. Also, spreading false rumors is classified as a fraudulent activity. Consequently, bear raids are illegal, but still occur when short sellers are careful to hide their activities from authorities.