The first bear raid and squeeze: Isaac Le Maire and the Dutch East India Company

In 1609, the Dutch East India Company (VOC) faced a bear raid by a syndicate of short sellers led by Isaac Le Maire, a former director. We reconstruct the forward trade between 1607 and 1611, the actions taken by the syndicate members, and the responses to these actions by the company. We argue that the bear syndicate members aimed for financial gain from share price declines, while their leader, Le Maire, participated for strategic reasons, that is, breaking up the VOC monopoly. We also show that the government refused to intervene at that time. The raid ended with a squeeze executed by an opposing syndicate, bankrupting several forward traders and blocking Le Maire’s plans. We characterize the bear raid and squeeze as a crucial episode in the more general tug-of-war between company directors aiming to turn the VOC into an instrument of the state and a diverse group of opposing investors.