Bear Raid

A bear raid is a market manipulation strategy where investors attempt to drive down the price of a stock by spreading negative rumors or short-selling large amounts of the stock. The goal of a bear raid is to create panic among other investors, causing them to sell their shares and further drive down the stock’s price. Bear raids are illegal in many markets because they involve manipulation and deceit. However, in volatile or lightly regulated markets, they can still occur. A successful bear raid can lead to substantial profits for the perpetrators, but it can also result in significant financial losses for other investors and damage to the targeted company.

Example

A group of traders might collaborate to short sell a stock and simultaneously spread false information about the company’s financial health, triggering a sell-off and driving the stock price lower.