The Bear in a Bear Raid needs to fulfill certain criteria to make the Raid attractive to Short Sellers. This includes
- The company value of the Bear has to be high and liquid enough to be attractive to Raiders
- The macro market is in a Bear phase, i.e. there is a strong downwards trend in overall valuations
- The Bear’s stock price starts quite high at the beginning of the Raid, based on typical KPIs and compared with other segments
- The Bear shows some weakness, either problems with maintaining growth as in a previous Bull market or some operational issues, e.g. due to integration challenges or strong competiton or unclear regulation
Here is a good summary of how a Bear Raid works.