I am by no means an expert, and have a disdain for short sellers, but I will say this: having watched the "Dirty Money" on Valeance where it appeared that shorts were the first to sniff out the fuckery, I believe we'd need some very strong regulation in place to cover cases like that, which really we should have anyways.
If you're a true "free market" believer, you will probably hold the belief that short-sellers are a part of the "built-in regulation" of the invisible hand. At least that's how I understand the argument.
Really, the biggest problem is that shorts have a vested interest in tearing a company down, be it through tricks like FUD, short ladders or just outright market manipulation. If they're just trying to make sure a stock is not overvalued, fine. If they start trying to kneecap thriving businesses through shady tactics, who does that serve other than the short seller?
If you're a true "free market" believer, you will probably hold the belief that short-sellers are a part of the "built-in regulation" of the invisible hand. At least that's how I understand the argument.
Really, the biggest problem is that shorts have a vested interest in tearing a company down, be it through tricks like FUD, short ladders or just outright market manipulation. If they're just trying to make sure a stock is not overvalued, fine. If they start trying to kneecap thriving businesses through shady tactics, who does that serve other than the short seller?