The problem with shorting a company that you believe is committing fraud is that you cannot do it alone. You need to convince the rest of the market that the c

The problem with shorting a company that you believe is committing fraud is that you cannot do it alone. You need to convince the rest of the market that the company is fraudulent - and that is a very expensive and complex process. ...but it does illustrate the value of short contracts in finance. They incentivize investors investigating and raising the alarms for the rest of the market. This company was particularly aggressive in defending themselves publicly, so it didn't happen until their market valuation was high enough to make it worthwhile for the big shorts to come in and crush it.