One of the great techniques of predatory short sellers is to keep the price of the company stock down.
Now you might think that a short seller would want to increase the price so he could increase his line at a high price.
However, for a company that has negative cash flow, or a company that needs to raise money, a los stock price will cause the company to raise money at lower prices causing more dilution and thus decreasing the value of the stock.
If the price is low enough, it may stop financing altogether. Some institutions have rules about avoiding low priced stock and if you push the price down below their lower limit, finance dries up.
A declining stock price can also cause morale problems among shareholders, employees, and even customers. A declining stock price or a low stock price is taken as evidence of some defect. Key employees with stock options are sensitive to the stock price.
Thus, aggressive predatory short sellers want the price to go down, to continue to do down and to stay down.
As the short seller only recognizes taxable gain when he closes out his position, he may not want the company to fail entirely, just to stay comfortably and surely in the land of the living dead with a price in the cellar and no chance of jumping back to life.
This was a wonderful technique in the days of naked short selling as you could short more than the outstanding stock and by using the laws of supply and demand push the stock into oblivion by destroying all attempts to get new money.
Personally, I find it too predatory to destroy companies with potential just by pushing the price down. We are here to benefit people, not hurt them. We only want to hurt scammers and bums.
This is why it is so wonderful to find some real crooks out there working a manipulation and crush them. You can attack without reservation. Where else do you have this license?
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