yeah ddwan is onto itshorters get involved in the market when...

yeah ddwan is onto it

shorters get involved in the market when they think the share price is too high
for simplicity the shorters saw PNV hit 4 dollars yeah? a 4 billion market cap and a run rate at that time of about 30 million a year (market cap was 135x yearly earnings, and the company was loosing money each year) - they thought it was overpriced
so they contact some mega fund managers (say those forced to hold PNV as its part of the asx200) asking them if they would lend their pnv stock to them. they say yea ok, but you need to pay us X amount fee per day to have these stock AND you need to return to us by a certain date)
the shorter pays the fee to the fund manager; the fund manager transfers these shares to the shorter. who then have the ability to sell these shares on market
supply and demand; if they can saturate the market with excess supply AND like many do then release negative social media and news articles saying PNV os over priced, or even saying they are going short on PNV, that can create panick in the market. so they sell their stock usually when the price is still very high. and they are hoping as they sell it all, this forces the price down which it will... but they need further catalysts so they put out these stories about it being over priced. and when retailers and other holders also start selling it causes the share price to plummet!
the shorters didnt have to tell you they did this
you dont know they sold 5 million shares at 3 dollars nor do you know when they have to give them back to the original fund manager
share price hits bottom, they buy the stock back at 1 dollar and they have profited 2 dollars per share and return the shares back to the fund manager


so its feerrked up yeah
because none of us know when the shorter sold the shares or how many or for how long or under what conditions. that only the shorter knows as well as the fund manager.
whats pretty bad imho is that the fund manager who lent the shares should be truing to grow the value of the fund, and the shorting activity can damage the company they sre shorting long term (say if this company needs to cap raise and with the shareprice now a dollar will cause lots of dilution and wealth destruction of holders)