Latest / How Canadian Markets Work / Short Selling | Canadian Investing

Transcript

Short Selling | Canadian Investing · How Canadian Markets Work

0:00
If you want to sell a car, you have to, you know,
0:02
actually own the car. Right. It's basically the
0:05
foundational rule of human commerce. You can't
0:07
just sell your neighbor's driveway to some passing
0:09
tourist. No. I mean, that would get you arrested
0:12
pretty fast. Exactly. But today, we are diving
0:15
into a corner of the financial markets where
0:18
that rule is just completely inverted. Oh, totally
0:21
flipped on its head. Right. We are entering this
0:25
wild world where you sell things you literally
0:27
do not own. subject yourself to infinite risk
0:30
and willingly pay massive fees every single day
0:34
just for the privilege of doing it. It sounds
0:36
like a terrible deal when you put it like that.
0:38
It really does. So today we are breaking down
0:41
the mechanics, the absolute madness, and actually
0:45
the surprising necessity of short selling. Yeah,
0:48
because there is a very real necessity for it.
0:50
The mission here is to unpack exactly how this
0:53
phantom marketplace operates, why the math is
0:56
so fundamentally terrifying, and why, despite
0:58
all that staggering danger, the people who execute
1:00
these trades are actually a vital immune system
1:03
for a healthy market. A really good way to think
1:05
about it, yeah. Okay, let's unpack this. To really
1:08
visualize the basic machinery here, I want you
1:11
to imagine a scenario. Let's say you have a neighbor
1:13
who owns this brand new, incredibly expensive,
1:16
top -of -the -line, right -on lawnmower. Okay,
1:18
a really nice one. Right. and you ask to borrow
1:21
it for the weekend. Your neighbor says, sure,
1:23
hands over the keys. But instead of cutting your
1:26
grass, you drive that lawnmower straight to a
1:28
pawn shop and just sell it to a stranger for
1:30
cash. Which, again, sounds like grand larceny
1:33
in the real world. Highly illegal. Yeah, highly
1:35
illegal. But in this specific financial context,
1:38
it's a calculated gamble. Your entire premise
1:41
in this lawnmower scenario is that in a couple
1:44
of weeks, that specific model is going to have
1:46
a massive factory recall. Or maybe just go on
1:49
heavy clearance, right? Exactly. The price is
1:52
going to crater. So right before your neighbor
1:54
comes knocking on your door to get their machine
1:55
back, you plan to stroll into a hardware store,
1:58
buy a brand new one at that vastly reduced clearance
2:00
price, hand it back to your neighbor, and just
2:03
pocket the cash difference. That perfectly captures
2:05
the mechanical reality of it. When you establish
2:08
this trade, you do not owe the lender the cash
2:10
you made selling the item. No, not at all. You
2:13
owe them the physical asset itself. Right. You
2:16
owe them the shares. So in the stock market,
2:19
when someone decides to short a stock, they are
2:23
borrowing shares, selling them immediately to
2:26
a third party at today's price, and establishing
2:29
a debt that is denominated in shares, not dollars.
2:33
Which means standard investing is just completely
2:35
flipped on its head. Literally backwards. I mean,
2:38
the golden rule everyone knows is buy low, sell
2:41
high. Right. But short selling is executing those
2:44
exact same two actions just in reverse chronological
2:47
order. You sell high today. With the hope that
2:50
you can buy low tomorrow. Right. But I'm trying
2:54
to figure out who the neighbor is in this real
2:57
world market structure because I mean retail
2:59
investors like me aren't just clicking a button
3:02
to willingly let hedge funds borrow our shares
3:05
so they can actively try to drive the price of
3:08
our investments down. Yeah you definitely aren't
3:10
doing that on purpose. So this has to be coming
3:12
from the institutional level, right? Like we're
3:14
talking about massive pension funds or index
3:17
funds, prime brokerages. That is the hidden plumbing
3:20
of the system. The lenders are indeed these massive
3:24
institutional holders. A major index fund, for
3:26
example, hold billions of dollars in stock, right?
3:30
And by design, they are going to hold those shares
3:32
for years, if not decades. They aren't trading
3:35
in and out every day. And shares are basically
3:37
just sitting in a vault. Exactly. Just sitting
3:39
there. And they don't lend these shares out of
3:42
some, you know, altruistic desire to provide
3:44
market liquidity. Right. They aren't doing it
3:47
out of the goodness of their hearts. No. They
3:49
do it because lending shares is a highly lucrative
3:51
secondary revenue stream. Because they charge
3:54
a borrow fee? Exactly. So it's essentially a
3:57
rental agreement. A very strict, dynamically
3:59
priced rental agreement. For these large funds,
4:03
lending out their portfolio generates free additional
4:06
yield on positions they were already holding
4:08
anyway. That's just free money for them. It's
4:11
a fiduciary no -brainer. I mean, if the stock
4:14
is a massive, widely traded mega -cap company,
4:17
what they call an easy -to -borrow name, the
4:19
supply of shares is huge, so the fee might be
4:22
negligible. Like a tiny fraction of a percent
4:24
annually. Exactly. Super cheap. But the laws
4:27
of supply and demand have to kick in pretty aggressively
4:30
if you want to short something obscure, right?
4:32
Say, a volatile tech startup that everyone already
4:36
thinks is a total scam. Oh, absolutely. Then
4:39
the borrow rate skyrockets. If the available
4:41
pool of shares is tightly held, or if there's
4:44
just a massive crowd of short sellers all clamoring
4:47
to borrow the exact same stock, the brokerages
4:49
just raise the rent. Wow. Yeah. For heavily shorted,
4:54
hard -to -borrow names, you could easily be paying
4:56
annualized borrow rates of 20, 50, even over
5:00
100%. 100 % just in fees. Over 100 % easily.
5:05
And that cost is calculated and applied every
5:07
single day your position remains open. That is
5:10
brutal. And there's another mechanical wrinkle
5:13
here regarding corporate actions that I honestly
5:16
couldn't wrap my head around at first. The dividend
5:18
thing? Yes, the dividend thing. OK, let's say
5:21
I borrow these shares from that pension fund
5:24
and I sell them to some new retail investor on
5:27
the open market. OK, tracking. While this trade
5:30
is open, the company issues a quarterly dividend.
5:33
Normally, if you own the stock, you get the cash.
5:35
Right. But here, the original owner, the pension
5:38
fund, still technically owns the asset on their
5:41
books. But the new buyer I sold it to also thinks
5:45
they own it. Because they do, practically speaking.
5:47
Right. So who is actually getting paid the dividend
5:49
by the company? The company pays the new buyer.
5:52
The person who bought the shares from you on
5:54
the open market is the recognized legal holder
5:56
of those shares in the eyes of the clearinghouse.
5:58
OK. So they get the actual dividend. But, and
6:02
here's the catch, The pension fund that lent
6:04
you the shares is legally entitled to the economic
6:07
benefits of their asset. They didn't forfeit
6:10
their dividend just because you borrowed the
6:11
stock. Oh, wow. So I have to make the lender
6:14
whole. You do. I am quite literally paying cash
6:18
out of my own brokerage account to replicate
6:19
that dividend for the pension fund. Straight
6:22
out of your own pocket. If the company pays a
6:24
$2 dividend per share, And you are short 10 ,000
6:27
shares? I instantly owe 20 grand. $20 ,000 is
6:30
instantly deducted from your cash balance and
6:32
handed directly to the lender. That is insane.
6:36
The meter is just constantly running. It really
6:38
is. Time is fundamentally against you in a way
6:41
it never is for a traditional long investor.
6:44
Right, because if you buy a stock and it just
6:46
trades sideways for three years, I mean, you
6:48
suffer opportunity cost. Maybe some inflation
6:50
decay, yeah. But you aren't bleeding actual cash
6:54
just to maintain the position. Exactly. When
6:56
you are short, every single day is financial
6:59
drain. You have the borrow fees. If you're utilizing
7:02
margin, you have margin interest. You have those
7:05
synthetic dividend payments we just talked about.
7:07
The clock is ticking loudly. Very loudly. It
7:09
eats directly into your potential profit margin
7:11
before the stock even moves a single penny. So
7:14
you're bleeding money in daily fees. But honestly,
7:17
that cash drain is just a paper cut compared
7:19
to the actual structural trap of the trade itself.
7:22
Oh, you mean the asymmetry. Yes, the terrifying
7:25
asymmetry of your risk. What's fascinating here
7:28
is how short selling takes the fundamental risk
7:30
profile of basic investing and completely inverts
7:33
it. Let's put some real visceral numbers to this
7:37
for everyone listening. If you do this the traditional
7:39
way, you buy a stock at $50 a share. The absolute
7:43
worst case scenario is that the company is a
7:45
massive fraud, they go bankrupt, the stock goes
7:48
to zero, and you lose your $50. Right. A 100
7:51
% loss is the mathematical floor. But your best
7:55
-case scenario, the stock could go to $100, $500,
7:59
$1 ,000. Your gains are, theoretically at least,
8:02
infinite. Capped losses, uncapped gains. The
8:06
traditional comfort zone. But when you short
8:08
that same stock at $50, you enter the twilight
8:11
zone. Your absolute best -case scenario is that
8:14
the stock goes to zero. You make your $50 and
8:16
the game is over. Right, your maximum possible
8:19
gain is a hard -capped 100%. But your worst -case
8:23
scenario has no ceiling because a stock's price
8:26
has no theoretical upper limit. It can rise infinitely.
8:29
And because your core obligation is to eventually
8:31
buy those shares back on the open market to return
8:33
them to the lender... You are legally obligated
8:36
to pay whatever that new astronomical price happens
8:39
to be. Exactly. Let's trace a trade gone wrong,
8:43
just to make it real. Yeah, let's do it. You
8:46
decide to short 1 ,000 shares of a company at
8:50
$50. You borrow them, sell them, and you collect
8:54
$50 ,000 in cash. Okay, now that 50 grand just
8:57
sits in my brokerage account as collateral, right?
8:59
It's locked up. I can't withdraw it. Right, it's
9:01
locked. Now, scenario A, you are a genius. Six
9:06
months later, the stock drops to $30. Nice. You
9:09
buy your 1 ,000 shares back for $30 ,000, hand
9:12
them back to the lender, And you walk away with
9:14
a clean $20 ,000 profit. Well, minus my daily
9:17
borrow fees. Minus the fees, of course, but basically
9:20
a textbook execution. You capitalized on an overvalued
9:23
asset. But scenario B is where the nightmare
9:26
starts. The company announces a massive, unexpected
9:29
breakthrough. The stock doesn't drop. It surges
9:32
to $90. Uh -oh. Now you have to buy those thousand
9:35
shares back for $90 ,000. But you only collected
9:38
50 grand when you opened the trade. Right. You
9:41
are now down $40 ,000 on a position where your
9:44
absolute maximum best case profit was only ever
9:48
$50 ,000. And in the landscape of short selling,
9:51
a $40 ,000 loss is honestly just a flesh wound.
9:54
Just a scratch, yeah. Because let's look at scenario
9:57
C. Oh boy. The stock catches fire on social media.
10:00
It becomes a retail darling. Or maybe a rival
10:03
company announces a hostile takeover bid at a
10:06
massive premium. The stock rockets to $200 a
10:09
share. So, to buy back my thousand shares now
10:12
costs me $200 ,000. Yep. You have lost $150 ,000.
10:17
Your losses are three times the size of your
10:20
initial collateral. That is just terrifying.
10:23
And the mechanics of how you get from $50 to
10:26
$200 are critical here. You didn't just wake
10:28
up one morning, look at your screen, and passively
10:31
decide to accept a $150 ,000 loss. Right. Because
10:35
my broker was watching the entire time. Exactly.
10:38
You're operating in a margin account. As that
10:41
stock price climbs to 60, then 80, then 100.
10:44
The mathematical liability of my account is expanding
10:47
rapidly, which means my account equity is plummeting.
10:50
And the broker isn't going to just sit there
10:52
and watch you go into endless debt that they
10:54
might end up on the hook for. They issue a margin
10:57
call. They demand I deposit more cash into the
10:59
account immediately to cushion the growing risk.
11:02
And if you cannot wire that fresh cash immediately,
11:05
the brokers automated risk management systems
11:07
just take over. They don't even ask. Nope. They
11:10
will step in and forcefully buy the shares on
11:12
the open market on your behalf to close the position
11:15
and neutralize their own institutional risk.
11:18
So you completely lose agency over the trade.
11:20
You don't get to wait it out or hope it bounces
11:22
back. You are forcefully bought in, locking in
11:25
those catastrophic losses at whatever the market
11:28
price happens to be at that exact second. Which
11:30
perfectly sets up the structural chain reaction
11:33
for the most famous phrase in all of short selling,
11:35
the short squeeze. Yes. Since losses can be theoretically
11:39
infinite and automated broker systems will force
11:42
you to buy if your equity drops too low, a heavily
11:45
shorted stock that suddenly starts rising becomes
11:48
an absolute disaster zone. It is a mechanical
11:50
feedback loop. I mean, trace the dominoes falling.
11:55
You have a stock with heavy short interest. a
11:58
piece of unexpectedly good news hits the wire.
12:01
The price ticks up. Instantly, the equity in
12:04
all of those short sellers' accounts begins to
12:06
bleed out. Right. And the most over -leveraged
12:09
accounts get margin called first. To satisfy
12:13
those calls, or simply to cut their losses before
12:16
things get worse, those traders have to do what?
12:19
They have to buy the stock. I mean, it's the
12:21
only mathematical way to close the position and
12:23
return the borrowed shares. They execute buy
12:26
orders. But what happens to a stock's order book
12:28
when a massive wave of forced buying hits a market
12:32
that suddenly has very few willing sellers? The
12:34
price gaps up even higher. And faster. And that
12:39
secondary price spike drops the account equity
12:42
of the next tier of short sellers. Ah, so then
12:45
they get margin cold. Exactly. Their brokers
12:49
forcefully buy shares on their behalf, driving
12:51
the price up even further. It is a self -feeding
12:55
violent upward spiral. And it's violent because
12:58
this buying isn't voluntary, right? Right. These
13:01
aren't value investors who suddenly believe in
13:03
the company's long -term vision. This is forced
13:05
price insensitive buying. They are hitting the
13:08
buy at market price button simply to survive.
13:11
Meaning they will pay literally any asking price
13:14
just to get out of the burning building. It's
13:16
basically a downward market crash. Just operating
13:19
in reverse. Yeah. So if the math is this inherently
13:23
stacked against you, I mean if you are facing
13:25
infinite risk, capped gains, bleeding daily fees,
13:28
paying out -of -pocket dividends, and living
13:30
under the constant threat of an algorithmic margin
13:33
cascade, why does this practice even exist? That
13:36
is the million -dollar question. There has to
13:38
be a compelling upside. There is. But here is
13:41
where we have to pivot from the mechanics of
13:43
risk to market ecology. To understand why short
13:47
sellers exist, you really have to examine the
13:50
structural incentives of every other participant
13:53
on Wall Street. OK. The modern financial market
13:56
is fundamentally a long only machine. Think about
13:59
a publicly traded company. Company management
14:01
desperately wants the stock price to go up because
14:04
their executive compensation and stock options
14:06
are tied directly to it. Naturally. And Wall
14:09
Street analysts want the price to go up because
14:11
their banking divisions rely on lucrative underwriting
14:13
and advisory fees from those exact same companies.
14:16
Right. Issuing brutal sell ratings tends to sever
14:19
those corporate relationships pretty quickly.
14:21
And obviously, the millions of everyday retail
14:23
investors holding the stock in their retirement
14:25
accounts want it to rise. The entire incentive
14:28
structure of the market is designed to be blindly
14:30
optimistic. Exactly. It is profitable for everyone
14:34
to just look the other way when accounting irregularities
14:37
or red flags pop up. Nobody is getting paid to
14:40
find a problem. Except the short seller. Ah.
14:43
They are the only market participants financially
14:45
incentivized to tear a company's financial statements
14:48
apart looking for fraud, fabricated revenue,
14:51
or outright lies. Because they profit if the
14:53
stock goes down. Right. They do the grueling,
14:57
highly specialized forensic accounting work,
14:59
reading the buried footnotes in quarterly filings,
15:02
tracking offshore shell companies, interviewing
15:04
former employees, stuff that the rest of the
15:06
market actively ignores because it ruins the
15:09
narrative. ruthless building inspectors. I love
15:14
that analogy. Right? Imagine you're attending
15:16
this massive lavish gala in a beautiful high
15:19
-rise penthouse. The music is playing, the champagne
15:22
is flowing, the vibe is just incredible. Everyone's
15:25
having a great time. Exactly. Suddenly a building
15:27
inspector kicks the doors open, shuts off the
15:29
music, takes a sledgehammer to the drywall, points
15:32
to a rotting steel support beam and yells, this
15:35
entire structure is fundamentally compromised.
15:38
Everybody out. Total buzzkill. Nobody likes that
15:41
inspector in the moment. He destroyed the party.
15:44
The host of the gala is going to scream at him,
15:46
call him a liar. But if that beam really is rotting,
15:50
that universally despised building inspector
15:52
is literally the only reason the roof didn't
15:55
eventually collapse on everyone's heads. The
15:57
reaction of the gala host, in your analogy, perfectly
16:00
mirrors corporate behavior. Really? Oh yeah.
16:03
When a short -selling firm publishes a massive,
16:06
documented report exposing an ongoing accounting
16:08
fraud, The companies caught red -handed almost
16:11
reliably attack the short sellers themselves.
16:14
Instead of addressing the actual fraud? Exactly.
16:17
They launch PR campaigns accusing them of illegal
16:20
market manipulation. They call them un -American.
16:22
They file massive defamation lawsuits. They aggressively
16:26
attack the messenger to distract from the allegations.
16:29
Wow. Now, short sellers aren't infallible. They
16:33
get it wrong. And sometimes their theses are
16:35
deeply flawed. But historically, a staggering
16:38
number of the largest corporate frauds in modern
16:40
history were first brought to light by short
16:43
sellers. People who were willing to do the math
16:45
and take on the asymmetric risk when everyone
16:47
else just wanted the stock to keep climbing.
16:50
Precisely. So they perform incredibly valuable
16:53
forensic work for the broader market ecosystem.
16:55
But even these specialized professionals face
16:57
major, unpredictable structural traps that have
17:01
absolutely nothing to do with whether their underlying
17:03
thesis is actually correct. That's the scariest
17:06
part. Right. You can be 100 % right about a fraud
17:10
and still get wiped out by the plumbing of the
17:12
borrow market. Absolutely. First, let's talk
17:15
about the concept of naked shorting. What is
17:18
the mechanical difference there? So standard
17:20
shorting requires you to locate and secure a
17:23
borrow before you sell the shares. You have to
17:25
find the lawnmower first. Right. Naked shorting
17:28
is the act of selling shares short without ever
17:30
having arranged the borrow in the first place.
17:32
You are essentially selling phantom shares, throwing
17:35
supply into the market without a net. That sounds
17:37
incredibly dangerous for the market. It is. It
17:41
is heavily restricted and illegal in most contexts
17:43
for a very good reason. If traders could just
17:46
endlessly sell shares that don't exist, they
17:49
could artificially dilute a company's stock pool
17:51
to infinity and just crush the share price into
17:54
the ground. So the entire regulatory system of
17:57
locating shares and forcing delivery exists to
18:00
prevent that structural manipulation? Exactly.
18:03
Okay. So you do the work, you find a legitimate
18:06
lender, you secure the borrow, you pay the fees,
18:08
and you short the stock legitimately. But even
18:12
then, there is a hidden trapdoor built into the
18:14
contract called buy -in risk. And honestly, the
18:18
psychology of this one is just brutal. It's the
18:20
worst. We established earlier that you borrow
18:22
these shares from an entity like a pension fund.
18:25
What happens if that pension fund's portfolio
18:28
manager wakes up one morning on a random Tuesday
18:30
and decides they want to rebalance their portfolio
18:33
and sell those shares? Well, the lender has the
18:36
absolute right to recall their shares at any
18:38
time. It is their asset. Right. When they issue
18:41
a recall, Your broker has a very short window
18:44
to scramble and find a completely different lender
18:46
to borrow replacement shares from, just to keep
18:49
your position open. But if the stock is a heavily
18:52
shorted battleground name and the available float
18:54
has dried up, there might not be any replacement
18:57
shares to locate. And if the broker can't find
19:00
a new locate, you are out of luck. You're just
19:02
done. You are forcefully bought in. The broker
19:05
will automatically close your short position
19:07
at whatever the prevailing market price is that
19:09
morning, lock in your final profit or loss, and
19:12
return the shares to the original lender. The
19:14
psychological stress of that is immense. Your
19:17
thesis could be completely correct. You know
19:19
the company's financials are fake. You know the
19:21
stock is going to collapse next week. Yep. But
19:23
because of random market plumbing, because one
19:26
pension fund decided to rebalance on a Tuesday,
19:28
you are forcefully ejected from the trade. You
19:31
lock in a loss. And then you just have to watch
19:33
from the sidelines as the stock plummets exactly
19:35
like you predicted it would. So you are always
19:38
at the mercy of the borrow market. Even the timeline
19:41
of the trade is never entirely under your control.
19:44
Never. Knowing all this mechanics, there is a
19:46
piece of public data available to the everyday
19:49
listener, right? You can look up the short interest
19:52
of a specific stock, basically the total number
19:54
of shares currently sold short divided by the
19:56
total available float. Right. It's public info.
19:59
If I'm an average investor researching a stock
20:01
and I see it as a massive towering short interest,
20:05
how should I actually interpret that data? It's
20:07
crucial to understand how to process that signal.
20:11
A high short interest tells you something very
20:13
specific. A group of highly informed, highly
20:16
motivated market participants who are taking
20:18
on infinite structural risk and paying exorbitant
20:21
daily fees are betting millions of dollars that
20:24
this company is fundamentally overvalued or broken.
20:27
That is data you just cannot ignore. It strongly
20:30
suggests there might be rot in the support beams.
20:32
The building inspectors have parked their trucks
20:34
outside and are rolling out the blueprints. Exactly
20:36
that. However, because of the mechanics we just
20:40
walked through, it also means the stock is a
20:42
coiled spring. Because of the squeeze potential.
20:45
Right. It is highly prone to a violent short
20:49
squeeze. If the company releases even mildly
20:52
positive news or if a retail frenzy ignites,
20:55
all those short sellers could get trapped in
20:57
that algorithmic margin cascade. So high short
21:00
interest isn't a definitive cheat code to either
21:03
buy or sell? No, not at all. It is a warning
21:06
sign that the stock is a contested battleground,
21:09
and the upcoming volatility is going to be extreme.
21:12
So what does this all mean for you, the listener?
21:15
Let's bring this home. Shorting is the act of
21:17
borrowing an asset you don't own, selling it
21:20
high today, and taking on the obligation to buy
21:22
it back low tomorrow to make the lender whole.
21:25
And the mathematical realities are unforgiving.
21:28
Your potential upside is strictly capped at 100%,
21:32
while your potential downside literally has no
21:34
mathematical ceiling. You bleed cash and daily
21:37
fees and synthetic dividends just to maintain
21:39
the position, meaning the passage of time inherently
21:42
works against you. And thanks to the automated
21:44
risk systems of brokerages, you are constantly
21:47
walking the tightrope of a short squeeze, where
21:50
rising prices trigger margin calls, forcing traders
21:53
to buy the stock at any price. Which just drives
21:56
the price up further in a vicious self -feeding
21:59
cycle. Yet despite the sheer terror of the trade,
22:03
short sellers serve a critical immune function.
22:06
They really do. They do the gritty, forensic,
22:08
investigative work that the rest of the financially
22:11
optimistic market is structurally incentivized
22:14
to just completely ignore. And honestly, understanding
22:17
these hidden mechanics fundamentally changes
22:19
how you consume financial news. How so? Well,
22:22
the next time you see a mediocre stock inexplicably
22:25
gap up 300 % in a single afternoon, you won't
22:28
just scratch your head. You'll recognize the
22:30
invisible gears turning beneath the surface,
22:33
the vanishing liquidity, the forced buying, the
22:35
margin cascades. And when a darling multi -billion
22:38
dollar corporation suddenly evaporates overnight
22:41
in a massive accounting scandal, you'll understand
22:44
why it took a lone financially incentivized short
22:47
seller to finally expose the blueprints. It totally
22:50
shifts the paradigm. Price action isn't always
22:52
just people buying because they believe in a
22:54
company. Sometimes it's a structural trap violently
22:58
snapping shut. It really is. And I want to leave
23:01
you with a final provocative thought to mull
23:03
over regarding the role these traders play. All
23:05
right, let's hear it. During times of severe
23:07
market panic or massive economic downturns, financial
23:11
regulators will frequently step in and temporarily
23:14
ban short selling on specific sectors. Usually
23:17
with the stated intention of protecting falling
23:19
stock prices, right? Exactly, to calm the broader
23:22
market. But if we accept that short sellers are
23:25
often the only participants financially incentivized
23:28
to uncover corporate fraud and expose rotting
23:31
fundamentals, what happens to the true health
23:34
of the market when regulators systematically
23:37
ban them? When we legally silence the building
23:41
inspectors just to keep the music playing at
23:43
the gala, are we really protecting the everyday
23:46
investors or Are we just accidentally protecting
23:50
the frauds? That is a phenomenal question to
23:53
chew on. The mechanics of the market are rarely
23:55
as simple as a buy or sell button. Thank you
23:58
so much for joining us on this deep dive into
24:00
the inverted high -stakes world of short -selling.
24:02
We will catch you on the next one.