decent (sometimes terrific) companies into the ground to destroy them, simply because they have the power to do so as a strategy to make money.

In the past, every once in a while, the shorts failed and that has always been pleasing to most of us that have witnessed sad stories.

For example, notable short failures decades ago, where more shares were short than were outstanding (done by various means whether naked shorting or multiple borrowing the same shares), included Priceline.com (now Bookings.com), Overstock, and Microstrategy. In those unusual instances where the shorts are wrong and overreached, massive short squeezes drove share prices up to excessively lofty levels. Shorts can make it impossible for cash strapped companies to raise money when in need. Despite the short attacks, the above companies survived without raising new money, eventually forcing shorts to cover.

In 2008, short sellers almost destroyed the US banking system.

Having said all that, short sellers provide an important constructive service when they act as responsible sheriffs of the markets. The best ones are smarter than longs, and shorts are usually right. Major short sellers usually do better research, often tease out accounting fraud, expose greedy company leaders, and bring overhyped stocks down to earth.

With GME, the effort to destroy the decent retailer in tough times due to Covid seemed decidedly unjust as the stock was driven to the brink at $3 per share. This morning it's at $500 per share. GME's seeming unfair demise had been discussed widely for months when one Reddit/WSB dude did some very serious research that persuaded legions that Gamestop was more than viable, that the stock was way under valued, that the massive shorts in the stock were fishing is the wrong pond, that soon they would be forced to buy back shares, and would soon be the victims of the Mother of all short squeezes that would send the stock price to the moon.

GME will likely now have the means to sell more shares, relieve burdensome debt, and when the share price returns to earth, it will likely settle at levels much higher than before this craze, probably somewhere around $50, would be my wild guess.

Wherever the price settles, experienced traders know that the short covering and momentum will soon play itself out and the GME share price will decline, a lot, because AT SOME POINT, THE LONGS MUST ALSO GET OUT. To what high level it reaches before that, and the timing of when we see the top, is anyone's guess. But the music must eventually stop.

Buffett: "In the short run stock prices are a voting mechanism, in the long run prices are are weighing mechanism."

Because the Reddit GME storm unleashed something so big and beyond anyone's imagination, short sellers are becoming more fearful and have begun to cover positions on other heavily shorted companies, some of which may be more deserving of the hit than GME. Moreover, the entire market has been shaken, perhaps in part because big short institutions must sell other stocks to raise money for short covering.

Reddit/WSB picked the right company to make an example of short sellers in GME.

Chamath made the right policy recommendation: make the institutional short sellers disclose all their positions long and short, which the SRC now allows them to hide. Who can forget Bill Ackman on CNBC literally crying that the Nation was going to hell, feigning concern while he was SECRETLY heavily short. Three days later after he crashed the stock market, he reemerged all smiles when it became known that he made billions on his short trade.

Short sellers may have to be more careful in the future.