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_Generally_, people short (or buy puts, anyway) on companies because they think they will go down. You're thinking of a kind of _attack_, but that's not at all
by rsynnott 1y ago
_Generally_, people short (or buy puts, anyway) on companies because they think they will go down. You're thinking of a kind of _attack_, but that's not at all the norm. Most shorts are just people thinking "the market if overpricing this"; if they're right (and if the market corrects itself in reasonable time), they make money.
(There is a third scenario, where the likes of Hindenburg Research take out a short position and then reveal problems with the target company, which naturally pushes their price down, but again that's rare.)