In many ways, it seems a Main Street vs Wall Street debate, where short positions and their hedge fund masters often are seen as being on the side of the latter. The question is whether this is true and as such it makes sense to reverse the question in terms of whether short sellers add any broader economic value: we would argue that they do.
However, we also acknowledge that short selling is a dangerous gamble: in the same way traders land in a ‘gamble for survival’, so do companies and their managements.
Companies will fight short sellers especially in desperate situations: the optionality of fight or flight is reduced when there is nowhere to fly because the corporate jet has been impounded.
