I don't like short-selling, because essentially you are making profit on the misery of others - but I tolerate it because I value freedom more.
At least, I'm glad it seems that WSB has somehow managed to defeat "ugly" speech with "more speech".
The way I see it, every action you take in the stock market is a reflection of your beliefs; if you buy a stock, you believe, and are indicating, that the stock is undervalued. If you sell a stock, you believe that the stock is overvalued.
Short selling is a valuable way to indicate that you believe a stock is overvalued whenever you don't own the stock.
I understand why some may read about short selling and think it's profiting off of other's miseries, but they provide value in the market, and whether or not people are short selling the stock, if it's overvalued then it's overvalued.
Perhaps seeing a stock being heavily shorted would encourage others to sell their shares, but think that might be stretching it a little.
But what about when a market actor has enough wealth to massively short sell and enough media pull to be able to create a self-fulfilling prophecy about a company being in bad shape? (And enough pull with regulators to be let off the hook with the lightest of penalties?) This is when the market is no longer healthy nor free.
That's not true. You could believe that the company is stable and gives a good dividend each year. It could be valued perfectly well and you'd want to buy it because it would be precisely worth it to you. less than or equal, essentially, not simply less than.
>Short selling is a valuable way to indicate that you believe a stock is overvalued whenever you don't own the stock.
I don't think this is true, because the reporting on shorts isn't constant and because traditionally it's a far smaller community.
It's a valuable way to indicate that SOME people believe a stock is overvalued and seems to have been used as a replacement for independent research and valuation of a company.