Shorts do not sell the same shares twice, they borrow them from someone who actually owns them to sell. They do not affect the float in any way since the shares have to be there to borrow.
Short provide liquidity to the market and trust me when the stock/market is tanking shorts can provide ‘brakes’ when they all start buying to cover.
Yes I am a proud shorter. I prefer it to long any day.
“Shorts do not sell the same shares twice, they borrow them from someone who actually owns them to sell.”
Well that’s all well and good - but the problem is NAKED short selling.
If you can keep selling, and dry up all the buy orders WITHOUT REGARD TO WHETHER OR NOT YOUR BROKER HAS THE SHARES TO LEND, OR IF INDEED THEY REALLY EXIST, you see the market drop 700 points today.
When FTC, or Failure To Cover, goes unrecognized and unpunished - shorts run wild.
Yes they are sold twice. They are sold once to the buyer who went long, then sold again when sold short borrowed or not. This means that there more sellers than buyers which drives the price down. That means the float has been artificially increased even if temporary. That’s the whole point of shorting. Its not the innocent absorbing the difference in price between the high (sold short) price and the buy back price (cover) that shorts would have you to believe. Sure they buy them back or cover but most times the damage has been done by then. This thing of providing liquidity to the market is a shorts myth. If an investor wants liquidity just buy stocks of companies with a higher float and average daily volume.