You and your broker have to be pretty damn brazen to iron grip a highly liquid stock all the ways down to -95%.

The illusion isn't over for Tesla, not a chance it will be over for SpaceX in a year.

Putting one's money where their mouth is in expressing that a company's stock appears overvalued is very low on my list of "things that exploit the proletariat."

How is shorting a stock gaming the market?

You feel a stock is overvalued and you short it. You feel a stock is undervalued and you buy it. What's the difference?

What a weird misunderstanding. Shorting reduces fraud in the market, and making it harder to short increases it. There's a reason shady managers had shorts, it increases the chances their bad behavior will be uncovered and punished financially.

God forbid an individual makes a profit from shorting. What would be left for hedge funds then? /s

Going long or going short is your bet on the market. If you can go long, you should be allowed to go short. Restrictions on any trading means you don’t have confidence in the price in which case it shouldn’t be available for trade.

Betting is what everyone who jumped into retail investing and meme stocks does with it, but shorts are a valuable tool in the economy for hedging risk. It also is a good indicator for fraud too.

“Broader economic purpose”?

It’s all betting.

If someone wants to dress it up in jargon or talk about beneficial second order effects, they can. But if putting money on an outcome you can’t control isn’t gambling, I don’t know what is.

To settle on a price, you need smart investors to be able to push it either way, which they need shorting and leverage for.

Plus there's option traders who naturally need to go short sometimes.

The market “settling on a price” includes the actions of short sellers.

I'm not certain you're right, but I think this opinion deserves considerably more (fair) discusson than it's getting.

Lots of replies either personally benefit or just assume the "way things are" is the best, but the stock market has gotten highly abstracted from the original intention of providing capital to grow companies via means other than bank loans.

I get the argument that shorts and friends help make the price the stock is being sold at more accurate, and I believe there's some truth there, but also we constantly see stock prices fluctuate by 10+% in a single day and I have trouble believing the actual value of all these companies changed that much in a single 24 period.

The market will more efficiently settle on a price if market participants can push the price up (buying) and push the price down (shorting).

the company manipulates itself to look its best possible, taking long term bad decisions in order to juice the value, and wont have more immediate items to juice the share price again for a while

its a reasonable expectation that 3 months after an IPO the price will be lower than it was at IPO

not really a bet so much as that on average the prices at IPO are a local maxima

Why is line go up price discovery acceptable, but line go down price discovery not? If the shares are trading, you should be able to short, it’s arbitrary to disallow it. It is quite literally a part of the market settling on a price.

(under the assumption your broker is managing their risk if your losses from a short position potentially exceeds capital available for liquidation if the trade moves against you)

Borrowing and selling are both pretty straightforward financial actions. It seems strange to say you're not allowed to combine the two.

Isn't it all speculation always though? That's why stock picking doesn't work and ETFs are popular.