Test of understanding
People can be long, or short, and this creates market equilibrium.
But above relates to trading, the bet of whether price will go 👆🏼 or 👇🏼.
If the price of stock is to be more reflective of value assigned by investors, then buying and selling will determine the price equilibrium.
So banning short selling merely impacts opportunist traders, and removes volatility.
A company which is not performing well will see its stocks sold, and capital by investors redeployed somewhere else.
However if capital is “free and unlimited”, and corporate social bailouts being the norm, the price of a blue chip stock will lean towards only 👆🏼