Translated by Google translate
Article written by Marco Astorri, ex-CEO of Bio-on
In recent years, we have repeatedly witnessed a disturbing phenomenon: the ability of a single report, released by self-styled activist funds or analysts who are not always transparent, to undermine healthy companies in a matter of hours. In these cases, it’s not the solidity of the numbers or industrial projects that count, but the power of a narrative crafted to generate panic. This is what I call “toxic speculation”: a mechanism that doesn’t help the market determine the price, but distorts it to the advantage of a few and to the detriment of businesses, savers, and workers. The legitimacy of criticism is not in question, nor is short selling as a market tool. The problem arises when speculation fuels partial information, dossiers crafted to strike at moments of maximum visibility, without the possibility of immediate verification. Thus, the market becomes hostage to perception, and the real economy pays the price. This is why I believe we need serious reflection on how to defend the system without stifling legitimate criticism. There are at least five areas where rapid action could be taken.
The first concerns preventive transparency . Those taking significant short positions should publicly disclose them—even if they are less than the current regulatory threshold of 0.5% of share capital—before publishing any critical reports. This is a simple way to ensure the market knows whether those reporting an alleged problem also have a direct financial interest in the stock’s decline.
The second is the filing of evidence . Before publishing analyses that could have a direct or indirect effect on the stock’s performance, those producing them should be required to upload the documents and data supporting their claims to a certified digital register. This would discourage vague or manipulative claims, offering the market a minimum level of verifiability.
The third proposal is a rapid arbitration system through the creation of an independent technical body capable of ruling within 10 days on the main disputed elements of a report and with the power to temporarily suspend the dissemination of potentially harmful content if deemed “manifestly misleading.” This would not replace the judiciary or the authorities, but rather provide rapid technical feedback that reduces uncertainty and limits the immediate impact of unverified information.
Another issue concerns the regulation of activist funds. More stringent transparency requirements should be introduced, requiring disclosure not only of short positions but also of any relationships or contracts with parties who have held them. This would make conflicts of interest transparent: the market would then be able to judge the merits of the analyses, but it is unacceptable for those with a direct interest to present themselves as independent. To protect the market and investors, severe penalties should be established, including a specific crime in the event of omissions or false declarations.
Finally, specialized and intelligent surveillance is needed . The speed of communication requires new tools: authorities should be able to monitor the spread of news and reports in real time, even with the help of artificial intelligence, capable of detecting inconsistencies, patterns of linguistic manipulation, or significant omissions. This work should translate into technical alerts , which are non-binding but useful for guiding regulators and the public, so as to more quickly distinguish between well-founded analyses and purely speculative campaigns.
These are common-sense measures, easily implemented and capable of raising the quality of financial debate without limiting legitimate criticism. Finance is useful when it helps correct errors and reward innovation; it becomes toxic when it becomes a hall of mirrors that destroys trust and value.
Businesses are responsible for demonstrating solidity with facts. Institutions, regulators, the media, and investors, on the other hand, have the task of ensuring that the game is played on a level playing field, without the noise of the moment overriding the industrial reality. Only in this way will finance do its job: serving the economy, not destroying it.
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