Ann: Market Update CEO Announcement and General Law Review, page-104

I'm not telling you what to do, merely expressing concern. Please feel free to ignore my advice - though it was offered in good faith.

@croasian
I didn't mean to imply the company failing was an act of god. If it came across that way then I didn't express myself well enough.

Of course there are arguments for and against investing in any capacity, but there specific ones related to shorting that should be taken note of before going ahead with it. You've probably heard all this before, but the potential upsides and downsides of going short are vastly different than going long - and in the wrong direction.

Assuming you are not trading on margin...
* Going long at worst you can lose 100% of your investment, while at best there is no upper limit on your return.
* Conversely going short at best you can receive a 100% return (doubling your money), while at worst there is no upper limit on the amount you can lose (you can lose way more than your initial investment)

Also because shorting utilities borrowed stocks it encourages short term trading. Additionally the limitation on the maximal return encourages shorter to trade on margin - vastly increasing risk and potential losses. You could wipe yourself out very quickly with this strategy - and wipe yourself out in a way that results in you owing money to people that you have no hope of paying.

Of course money can be made this way by smart people and it can be easier to discover frauds than successful companies. Just remember that in shorting the shares are borrowed and that the market can stay irrational longer than you can remain solvent.