A well functioning market contains the incentives to bring correct information to it. If Ackman was right about Herbalife then he stood to make billions. He w

A well functioning market contains the incentives to bring correct information to it. If Ackman was right about Herbalife then he stood to make billions. He wasn't, and the process that unfolded over 5 years was a Good Thing, both for The Market and Herbalife (he was actually right about some things, which they fixed). Herbalife is an excellent example of the market providing the right incentives and those incentives working out in the way we want them to. If Ackman had exited his position after the original corrections were made by Herbalife everyone would've won: he would've made money, long investors would have a stronger company, and Herbalife would be a real business. Instead he doubled down and so he lost, but everyone else still won. This sounds like a really high functioning market to me. If you think TSLA is bound for 0 there are ways you can make that bet today. The fact is no one thinks that, and so no one is trying to make that bet. Same with Twitter. > Taking these two strategies together, you can simultaneously have someone short a stock they expect to go down soon and someone else long a stock they expect to go up over 5-10+ years. Both can be right at the same time. You can then derive from this point that short interest is of limited to no concern to a long investor, which was my original point. Right, but this doesn't mean that the incentive to devalue companies that need devaluing doesn't exist. So as I said, I'm still not sure what you're arguing. Shorts seem to be doing what we want them to do. The market does not seem broken.