In other words, the shorts are totally right to be taking their position? A company that depends on its stock price to stay afloat is not a healthy company. Let’s take AAPL as an example. Their stock could plunge to $1/share and they would be absolutely fine because they have positive free cash flow, and thus don’t need to rely ok raising capital via selling shares.
Many of the shorters just think the company's overvalued.
But anyone aiming for that event to trigger is making a bet that enough people will make the same bet, in deliberate disregard of whether the stock's value is appropriate for the actual business.
It's kind of like a prisoner's dilemma. Is it 'right' for someone to defect?
That motive isn't saying anything about the company. It's a pure meta-move. That places outside of the normal "markets efficiently allocate capital" logic. It's profitable but very much not efficient to swing your weight around and make a company go out of business in a way that owes you money.