Indeed, they often close positions after leaving "fire and brimstone" on shares, i.e. after leaving a share with a ridiculously low price (see case of Saipem in recent 12-24 months with price fallen from 20/25 € to €3/4). "Shorters" open only on the basis of their own expected profit (as does every speculator, after all), riding on bad news (other example for us, Italians: the "crisis" of the spread of 2011).
When shorters close their position (i.e. when things start to go for the "right way".), this leads to sudden and sharp increases in the title, that are only good for speculators rather than investors.
Thirdly, going short leads to excessive pressure on the "bid" part of negotiation book, thus distorting the market.
See this table:
RISING PRICE
1) Buy
————————————
DIMINISHING PRICE
1) Sell
2) Do not buy (lack of liquidity on the market deters new investors and leads to more sales caused by "fear", to avoid to hold illiquid assets- e.g.. Current market of second houses)
3) Short
In this sense, going short involves major irrationality in the markets.
(It's also true that you can buy shares in leverage, with pressure on the "left" side of the table, but you can also go short in leverage too and therefore these effects are not included in the table because theoretically cancel each other out. But those who go long often pay interests, while several broker credit them to shorters).
Finally going short is unfair from the point of view of Rawls (as unacceptable behind "veil of ignorance"): If you "born"as speculators, nothing will change, but if you "born" as investor (like private, pension funds, mutual funds for savings) the presence of short position will tend, –coeteris paribus-, to depress your investments (also in the lifetime of securities within maturity – such as bonds).