I agree with @theloft that short selling can be beneficial. I...

I agree with @theloft that short selling can be beneficial. I don't believe short sellers do it to be altruistic, they do it to try to make money just like investors who buy stocks.

However, one result of short selling (which can be beneficial by saving future retail investors lots of heartache and financial loss) is that overvalued co's are identified, called out and shorted. This prevents them from continuing to rise to unrealistic valuations and helps to prevent more retail investors from buying in at unrealistic levels and losing money.

At the end of the day, shorters need to identify fundamentally overvalued stocks. They don't short stocks that they believe are fairly valued by the market (why would they). If they are incorrect in their overvaluation judgement, they lose money in a similar way to any other investor that takes a position (long or short) that does not go their way.

GLTA & DYOR