this post was submitted on 18 Apr 2024
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[–] dogslayeggs@lemmy.world 62 points 7 months ago (16 children)

The whole idea of short selling is wild and feels like it should be illegal, so I'm totally OK with informing people how to prevent what they see of as an investment from getting loaned to people who are only trying to devalue that investment.

However, it is funny coming from a guy who has probably done more shortselling in the last hour than most people will do in their lifetimes. It's also scummy to recommend paying to use a holding company he probably owns or gets kickbacks from.

[–] Fal@yiffit.net 2 points 7 months ago (7 children)

Why do you think short selling should be illegal? It's just borrowing shares

[–] MeekerThanBeaker@lemmy.world 32 points 7 months ago (6 children)

The way the stock market should work is someone investing money in a company they believe in. If the company does well, then you can receive dividends and/or sell some later on to turn a profit.

But greedy people have turned it into a game, into gambling. People who do it for a living know all the tricks, have supercomputers, have knowledge of other people's investments to create algorithms.

Has almost nothing to do with the company itself. They contribute nothing to society. Borrowing shares to short a stock is just an extension of that. You can make a lot more money that way, but again... it's gambling, not an investment in a company.

[–] Fal@yiffit.net 5 points 7 months ago (1 children)

Most of what you're saying isn't really a problem that affects anyone. You can still buy shares and collect dividends. How many shares short, or how often someone buys and sells a stock has 0 bearing on that. In fact all of that actually creates the liquidity that lets you buy fractional shares instead of having to buy in 100 share lots like you use to.

And short sellers are actually pretty important to the markets. They keep companies honest by having an incentive to investigate and publicize frauds and overvalued companies. People put way too much weight in how much impact shorting has, or people trading derivatives

[–] MeekerThanBeaker@lemmy.world 1 points 7 months ago (1 children)

I appreciate your thoughts. I admit I'm not too involved in shorts and there are bigger issues with the market than that. I just prefer that people wouldn't bet against a company simply to earn money. It's not going to change anytime soon, if ever. I just would prefer that stocks for sale were to invest in a company to help it grow, and not... I think this company is gonna crash... let me make money on that prediction.

[–] Fal@yiffit.net 3 points 7 months ago

I just would prefer that stocks for sale were to invest in a company to help it grow,

Buying stock on the market has no impact on helping it grow. The only money that goes from investors to the company are from the IPO or any additional share sales, which aren't common.

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