Reddit Hates Short Sellers, But the Stock Market Needs Them
Meme investors may like cutting shorts off at the knees, yet when the goal is setting accurate prices, people betting on shares to fall provide crucial information.
There’s something a little weird about short selling. Shorting—or betting that a stock’s price will fall—is a feature of finance that doesn’t have a close analogue in the real-world economy.
Buying a stock you like isn’t much different from purchasing a product that catches your eye. But if you’re walking through the local grocery store and see an item that sets your stomach turning—say, ketchup-flavored potato chips—you don’t stand in the aisle waving off other customers, telling them how bad it is. You don’t try to crush the bag. You just think, “Who in the world eats this … ” and go on your merry way without putting it in your cart.