I really don't see how short selling is tolerated by the lender of those shares. Isn't it shooting yourself in the foot if you're the lender? Regardless of fees earned by the lender, the story is the same - the price will be lower than before the lending them to the hedge fund and therefore any money made on fees / commissions or whatever you call it, may not cover the loss of capital value of those shares when you do get them back.
