Yes it's true. The problem is when regulator allows 140% of float to be shorted. Funny fact, this predatory short selling behaviour, driving small cap stock into the ground wasn't possible until 'uptick rule' was abolished in 2008. Who was main proponent for the abolishment? Ya boy Ben Bernanke who now works at Citadel. Go figure.

Agreed. Contractually selling a stock you dont own yet and will be required to produce at some point, is a much bigger risk than buying a share of stock and hoping it goes up.

When people short way more than the stock that exists it is a problem. Shorting assumes that there will be stock for sale which isn't necessarily true. It has infinite risk with finite reward

It's it necessary, really? Seems to me it's the exact opposite of investing to stimulate growth.