3 ms·
Short sellers are incentivized to uncover scams and overvalued equities, as a few other folks pointed out. There are firms like Muddy Water doing the hard work
by blueblisters 6y ago
Short sellers are incentivized to uncover scams and overvalued equities, as a few other folks pointed out. There are firms like Muddy Water doing the hard work of finding companies swindling investors and using publicly available data to make a case against them. Without short selling, they lose the incentive to do that.
- dheera 6y agoI'm fine with them not having that incentive. Scams can be uncovered by CUSTOMERS and plenty of other people than short sellers, and I don't think overvalued equities is actually a problem. Many times overvalued equities leads to faster adoption of EVs and solar and better GPUs and other nice things, which are more important to my personal life than maintaining the sanctity of capitalism.
- AlexandrB 6y agoOvervalued equities lead to market crashes that tend to wipe out the retirement funds of unsophisticated investors and bankrupt otherwise viable companies. Has everyone forgotten about the dot com bubble of 2000? If so I think we're headed for a reminder.