Okay, Failure might not have been the right word. Also, my main point was in regard to shorting on borrowed shares. If i'm short a company on borrowed shares I

Okay, Failure might not have been the right word. Also, my main point was in regard to shorting on borrowed shares. If i'm short a company on borrowed shares I should not be able to further lend those shares out for a short. But to my secondary point, which seems to be getting the most attention I can only say this. In a pure, utopian world it would be immoral for me to have a vested interest in a company 'Underperforming'. Without Shorting you would not have 'Only an increase in price' - thats silly. There would still be the option to sell your shares and since market dynamics dictates the price of those shares they can potentially fall to zero, thus losing money and if the shares fall enough, you could default on your credit, etc. This mechanism has the same protects a short has against fraud, mismanagement, etc. The difference here isn't just semantics. If i don't believe in a company, i sell my shares thus lowering the value of the shares (If the market agrees).