> How is someone supposed to prove that in a specific case? As one example: they could show a specific company that violated its margin constraints as a result

> How is someone supposed to prove that in a specific case? As one example: they could show a specific company that violated its margin constraints as a result of short selling pressure, which resulted in an unplanned margin sell, that forced it to sell assets at firesale prices, that triggered a liquidity spiral resulting in material harm. You could see this in a financial institution with a weak balance sheet that is forced to unwind long/illiquid positions. (This is why the SEC banned short-selling of financial institutions during the GFC; the ban lasted about three weeks before it expired.) Another mechanism would be short selling triggering a bank run, as debtholders & counterparties see a falling share price and think that signals a weakening balance sheet. It may take hours to calculate but it seems like the kind of thing that academics, journalists, and aggrieved CEOs would have already done the legwork on. A few hours to publish an academic paper or write an article for Bloomberg isn't much investment, after all. I'm not aware of any even theoretical models about how short-selling hurts non-financial institutions in material ways. Most corporations are primarily debt financed, not equity financed, aren't they? The historical debt-to-equity ratio of the S&P 500 is 1.7, I think.