The issue is that regardless of the companies "worthiness" they can short the company into bankruptcy. Let me give you an example of how (and WHY) this works.
How does this "shorting into bankruptcy" thing work?
The stock price should be a reflection of the fundamentals rather than the stock price *driving* the fundamentals.
Unless
In order for the company to survive, they have to sell stock. Which of course is creating more supply of the stock and therefore driving the stock down in the same way that shorting does. Except of course, when the company sells the stock, it doesn't have the added bullish component of being required to buy it back in the future and therefore creating more demand somewhere down the line.
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