You are correct. There is a simple reason shorter are not banned. They are a stabilizing influence on Stock prices. Sorters supply shares during steep increases in prices and subtract when prices fall. that Stabilizes the stock... If they were as bad as most people believe they would be outlawed quickly.
Take a look at when M/t K sold all their Lynas stock if not for large short position to smooth things out stock would have looked like a roller coaster.
LYC Price at posting:
$6.21 Sentiment: Sell Disclosure: Not Held
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