The less/more attractive is a matter of interpretation. The core issue is that there are two different sets of rules applying to Company A (no naked short sell

The less/more attractive is a matter of interpretation. The core issue is that there are two different sets of rules applying to Company A (no naked short selling) and Company B (naked short selling), but to an outside observer it would appear that there is only one set (no naked short selling as per regulations). This messes up even things like what you are describing: as half the shorts on Company B are naked, there aren't any shares to be bought back, so there would likely be less of a rise than what you would expect.