August 28, 2008, was a bad day for Dell Computer. The company reported earnings well short of analysts’ estimates, and said that its gross profit margin (a popular benchmark for performance) had fallen sharply. Investors dumped Dell shares, and the stock price fell fourteen per cent the next day. But to a small cabal of hedge-fund managers and analysts the numbers came as no surprise, because a source at Dell had tipped them off. These funds had shorted Dell’s stock, and cleared more than fifty million dollars in profit in a matter of days. It was, all things considered, a nice little trade.
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