[mschuster91]

> If there were another way to incentivize finding these types of companies without short selling, I would be interested.

In ye olde times before the invention and institutionalization of short selling and other financial instruments, this kind of research was the responsibility of the media (to raise the alarm) and the SEC/police (to investigate claims with the authority of the government, and prosecute offenders).

Unfortunately, most newsrooms have been "consolidated" or shut down entirely as the market for quality journalism has declined over the last decades, and there is an unhealthy "revolving door" between banks, hedge funds and other market players on one side, and regulatory agencies on the other side.

[pbronez]

Maybe? I think it’s really useful to give people an economic incentive to do socially useful things, like pointing out when a company is in an unsustainable position before it literally starts locking out workers.

Journalists are better spent digging into political situations that aren’t directly tradable.

Even if you think journalists should do the research and make results public instead of funds doing the research and keeping it private (until they reveal their conclusions through trading), I think you want shorting available as a RESPONSE to the reporting. Why would the companies change their behavior in response to negative press if they aren’t subjected to economic pain for ignoring it?

[kgwgk]

Short selling is older than the SEC.

[cardiffspaceman]

True. All this stuff was old-hat when the Tulip Mania "ended" in the 17th Century. There is even a tale about olive presses that reads a little like a futures contract's lifetime [1].

[1] https://www.thestreet.com/opinion/a-brief-history-of-stock-o...