Increasing the short position is bullish for a stock in theory in that every short seller must cover (buy back those shares) sooner or later, adding to demand (unless the price goes down to zero). That is bullish.
But a short seller is first and foremost a SELLER. The shares he sells add to SUPPLY, just like any other seller's shares. When supply is greater than demand, the price goes down.
"Death Spiral Financing" is one example of how shorting can drive a stock's price right into the ground, and it isn't necessarily even naked shorting.
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