Right off the top of my head: Options suffer from time decay....

Right off the top of my head: Options suffer from time decay. Also, commercial sellers/writers of options can/will lay-off their exposure in the underlying market (i.e. the PLS stock market, in this instance). Don't think that the oppies market operates in a vacuum without any linkages to affect the underlying. That's not how it works. It's all inter-connected.

I strongly disagree with your characterisation of the eventual outcome of a company that has a material short interest. It's a massive generalisation and over-simpliciation, in my experience. It's certainly not a forgone conclusion that PLS is destined for destruction simply because it has a large short interest right now. I appreciate that may be very unnerving -- esp. *if* the only experience with shorting has been associated with bankruptcy. However, I'm of the view that it (the short interest) will subside in time as the fundamentals improve with the cycle. As long as PLS management don't make any dopey mistakes, it'll sort itself out in the end. The outsized short interest will subside and company will survive and prosper, imo.

Agreed, re shorting being one weapon of choice for wannabe manipulators. That said -- and this is important -- over the several decades I have been involved in various markets (incl. equities) I have seen plenty of wannabe short manipulators who have ended up having their asses handed to them on a plate. Often, not always, it's because they overestimated their power to inflict fear, with little regard for the relevant fundamentals or the fact that there's an army of professional investors out there who are not easily intimidated and will quite happily push-back when the equilibrium price is seen to be unduly cheap. I keep circling back to the fundamentals. The fundamentals of the company, the fundamentals of the sector it operates in, yadda, yadda, yadda. It's important stuff.

The most succinct way to answer the calamity question is probably along the lines of "the law of unintended consequences". You see, if the authorities were eventually convinced to ban shorting, then it would stand to reason that a ban would also apply to borrowing to purchase shares. As articulated in other comms they are flip sides to the same coin. They both involve borrowing something you don't already have in order to participate in the market in a manner in which you would have otherwise been unable to do. If you remove one side of a thing in a market without addressing its alter-ego, then you can end up with very large imbalances, distortions, and unintended consequences than you set out to do in the first place. I'm agnostic on both, so it wouldn't bother me, one way or the other. But if you're gonna change the status quo, then FFS, don't do a half-job. The alternative involves books being written and movies getting made about the hapless authors of said half-baked misadventure.

Given my experience, I understand why the current short position exists. It doesn't bother me.