> However, this type of report often turns out to be nothing more than market manipulation and fraud.

This isn't true. Mountains of academic research has consistently shown that short sellers generate abnormal returns by detecting actual problems in the underlying company (often corporate fraud), not manipulating prices or spreading rumors.

Short sellers are often vilified by CEOs because they act as a form of corporate governance. But that characterization is not supported by the empirical evidence.

https://www.reddit.com/r/slatestarcodex/comments/la88gv/shor...