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Short Shrift For Short Sellers

Short Seller Andrew Left and Tesla CEO Elon Musk
Michael Newberg for CNBC, Mark Brake for Getty Images
Short Seller Andrew Left and Tesla CEO Elon Musk

Unlike most investors, short sellers make money when the value of a company falls. And they don't have a great reputation. They're often regarded as the vultures or hyenas of the financial world, preying on weak companies, and sometimes spreading negative rumors to bring a company down.

But quite often, short sellers perform a necessary task. They have a financial incentive to expose weakness and uncover the truth about a company's status. And when they do so, honestly and transparently, the market benefits.

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Cardiff Garcia is a co-host of NPR's The Indicator from Planet Money podcast, along with Stacey Vanek Smith. He joined NPR in November 2017.
Darius Rafieyan joined NPR in 2017 as the founding producer of The Indicator from Planet Money. He has produced stories about infectious disease outbreaks, the world's greatest air salesman, and the economics of Tinder.