Running discussion on SP, page-5635

I have asked this question many times over the years. I do not think however that they are simply riding the downs.

My understanding, as I have come to see it, is that shorters borrow the shares for a set period for a fee. They do not have to buy the shares so their entry cost is not massive. They take a risk, but undoubtedly they know exactly what they are doing and have a very good grasp of the risks they take.

My guess is that they then act in various ways to force the SP down. Their tactics may even include using trolls with casual identities to trash the targeted stock on forums such as HC (i.e. the equivalent of unseen voices yelling in the darkened theatre, "Hey, I smell smoke! Can anyone else here smell smoke?"), but their tactics also seem to include selling multiple small parcels while immediately buying them back again. This might cost them a bit until other less experienced or less confident traders / casual holders panic because the SP seems to be falling "for some reason they do not know, but assume that other smarter people do". Once spooked, these then add their shares to the selling spree at the same low prices, playing musical chairs - only to see somebody else buy them up quick - i.e. quite likely to those who originally sold their little parcels back and forth at a loss. Then eventually, after a few rinses and repeats, the borrowers will give their borrowed shares back to their lenders, along with the rental fee. These shorters-turned-buyers then own the additional shares they have bought at sub-market prices. For a while the SP stays low, but when there is no "wolf" on the horizon the more timid meerkats come out of their burrows and SP climbs again, including those snatched by the shorters. Naturally they are likely to then pump the value of the stock to increase its price again. Rinse and repeat. Meanwhile the original lenders have probably also been buying from panicked holders at lower prices than they would have encountered otherwise. The risk is that the shorters might lose money if they cannot force others to sell as low as they want them to. But bear in mind that they do not have to trade many actual shares to create the impression of a large trading volume, especially if they or their collaborators stand on both sides of the trades. The shorters may not have to put many actual shares at risk to get the result that they want. It is only if the SP has a genuinely good change delta (e.g. "We have signed a new FAB customer!") that encourages a genuine rise in enterprise value that they might miss out on some of their gains. The original holders get their shares back, and are unperturbed because they know that they were never holding to trade them in the short term. It is only the innocents who sell into the "FIRE! sale" that end up making most of the losses.

This is of course all only conjecture on my part, but I've watched the patterns enough times to see it as a 'thing'. DYOR and make your own decisions on financial matters. But if you are small fry you need to recognise that you are a food source for a whole ecosystem of parasites and predators. GLTAH.