[jsanford9292]

Unpopular opinion but to me this reinforces the massively important role of short sellers in free markets. Yes they are often on the wrong side of these "exposés" (Tesla comes to mind) and can create some harm in those cases, but being able to uncover frauds affecting tens of thousands of people is extremely valuable. These frauds may have lasted years and years longer and caused much more damage if not for firms like Muddy Waters.

[anm89]

Even in cases like Tesla, it seems like the only people the shorts hurt are themselves over anything beyond the long term.

[sk5t]

Why are shorts necessary in the presence of put contracts?

I think the problem some folks have with short selling is that it creates for the market an illusion of willing sellers where there may not be supply.

[rahimnathwani]

It's analogous to the reason coal was necessary even after we had electricity: short positions enable the production of put contracts. By selling you a put option, I'm taking a long position on the underlying stock. So I probably want to hedge that by selling a bit of my existing stock. But if I don't already own stock in that company then, without short selling, I can't provide that liquidity.

Short selling typically involves the sale of borrowed stock, mediated through dealer-brokers, so the stock that's sold short does exist. So there's no issue with supply.