Shitty company will go down in a natural way in a free market economy.
Why do you feel you need to help it to go down?
Why let people make money on someone's fail?
Why let people have incentives to ruin other people lives?
Why do you feel you need to help it to go down?
Why let people make money on someone's fail?
Why let people have incentives to ruin other people lives?
We should build safety cushions for people, not companies.
> Why do you feel you need to help it to go down?
Do you think it is a good idea to help Intel go bankrupt because it's shitty right now in comparison to AMD?
Of course not. But if either one of them has secret bad information, it's good for everyone to have it revealed to the public so the stock price can be more accurate.
Fraud may be rare but companies have negative info all the time.
I would say that short sellers are even more important around primary transactions because then share price matters more. Good prices prevent new investors being left holding the bag and inefficient allocation of capital which could have gone to a different business with better investment opportunities.
This is the crux. "Shitty" as in obsolete business model: Yes. Shitty as in fraudulent company behaviour: No.
In fact, fraudulent behaviour creates a competitive advantage. And there is only an incentive for the regulator to intervene in the most extreme cases.
Wirecard employed thousands of employees, paid taxes, contributed to social security, and created wealth for investors. Tesla has accelerated the spread of EVs and similarly created enormous wealth for investors. These are real, significant positive effects.