Shorting is not wrong per se. It’s useful. It’s the result of private investigation that can unveil fraud at the corporate level. Think Enron. Short selling is just the way those private investigators have at their disposal to achieve economic gains to pay for their efforts.
This is what short selling is all about. Or at least what it should be. Short sellers are often demonised. I desagree with the idea that the short sellers are the bad guys.
There are however abusive behaviours amongst short sellers. The GME over-short is just an example of it. They placed a risky bet by over-short and got caught with their pants down. And now they will go under. And the whole system is at risk. But instead of addressing the root of the problem, they focus on managing it, which may mean that overshorting may happen again…
(To be continued)