Purpose - The purpose of this paper is to empirically examine whether corporate insiders extract information from activity of outsiders, specifically the short sellers. Design/methodology/approach - Using portfolio approach and Fama-MacBeth regressions, this study examines the relation between short interest and subsequent insider trading activities. Findings - The following results are reported. First, there is a strong inverse relation between short selling and subsequent insider trading, which is partially due to common private information and same target firm characteristics. Second, insiders extract information from shorts. This information extraction effect is more pronounced for firms whose insiders have stronger incentives to extract shorts information (insider purchases, higher short sale constraints, and better information environments). Third, during the September 2008 shorting ban, the information extraction affect disappeared among the large banned firms, whose shorting activities were distorted. Research limitations/implications - The findings contradict the of-cited accusations corporate executives hold against short sellers. Instead, corporate insiders appear to trade in the same direction as suggested by shorting activities. Practical implications - Among the vocal critics of short sellers are corporate insiders, who allege that short sellers beat down their stock prices. Many corporations even engage in stock repurchases to show confidence that the stock will perform well going forward despite the short sellers’ actions. This paper’s analysis on their personal portfolios suggests the other way around. Originality/value - By focusing on how corporate insider trading is related to shorts information, this paper sheds new light on whether corporate decisions convey the true information the corporate insiders possess.

中文翻译：

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卖空者的信息性：内部人的观点

目的-本文的目的是从经验上检验公司内部人员是否从外部人员（特别是卖空者）的活动中提取信息。设计/方法/方法-使用投资组合方法和Fama-MacBeth回归，本研究检查了空头权益与后续内幕交易活动之间的关系。结果-报告以下结果。首先，卖空与随后的内幕交易之间存在很强的逆关系，这部分是由于共有的私人信息和相同的目标公司特征。其次，内部人士从短裤中提取信息。对于那些内部人员更有动力提取空头信息（内部购买，更高的空头限制以及更好的信息环境）的公司，这种信息提取效果更为明显。第三，在2008年9月的卖空禁令期间，信息提取的影响在那些被禁止卖空活动的大型被禁公司中消失了。研究局限/含义-研究结果与企业高管针对卖空者的指控相矛盾。相反，公司内部人士似乎在做空活动所建议的相同方向上进行交易。实际含义-卖空者的直言不讳的批评者是公司内部人士，他们声称卖空者压低了其股价。许多公司甚至进行股票回购，以表明尽管卖空者采取了行动，但股票在未来的表现仍然良好。本文对他们的个人投资组合的分析提出了另一种方法。