Short positions are part of an efficient allocation of capital and efficient pricing. They also effectively bring down the price of this company - so you can bu

Short positions are part of an efficient allocation of capital and efficient pricing. They also effectively bring down the price of this company - so you can buy more if you think it should be higher. Some people think Tesla is a mess. Short sellers help keep bubblicious prices down and, if those people succeed, they'll invest in companies that have a better shot of actually succeeding. Shorting is part of the spectrum: it goes from all of your money in a single stock to none to negative. I think one could argue that by not buying more Tesla stock, you are also not merely passive. You also have a detrimental effect. ;) Sources: http://www.economist.com/blogs/freeexchange/2010/12/financial_markets http://www.economist.com/blogs/freeexchange/2010/12/financia... http://marginalrevolution.com/marginalrevolution/2008/07/in-defense-of-s.html http://marginalrevolution.com/marginalrevolution/2008/07/in-... http://www.npr.org/sections/money/2008/09/in_defense_of_short_selling.html http://www.npr.org/sections/money/2008/09/in_defense_of_shor...