We examine short selling around dividend announcements and ex-dividend dates. Contrary to our initial expectation, we do not find abnormally low (high) short-selling activity prior to announced dividend increases (decreases), which runs counter to the argument that short sellers have the ability...

Research (Diamond and Verrecchia, 1987, and Boehmer, Jones, and Zhang, 2008) finds that short sellers are informed about the true value of stocks as current short selling predicts future returns. We test which short-sale sizes contain the most information. While studies (Diether, Lee, and...