NEWS
Short Selling Constraints Can Cause Security Prices to Deviate from Intrinsic Values
Researcher Melissa Porras Prado (RSM Erasmus University) looked at (“The Price of Prospective Lending: Evidence from Short Sale Constraints,” June 14) at how security prices incorporate future lending profits earned from lending shares to short sellers. “The results from this study imply that short selling constraints can cause prices to deviate from the intrinsic value due to the loss of information and the capitalization of future lending gains,” the paper concludes.
