It's even more insidious than that! By selling "air shares" (naked shorting), an inexhaustible share float (which doesn't really exist) basically makes the supply never-ending. I was in a sub-prime called NFI a few years back that was completely taken down by naked short sellers. These bastards will not cover, and their plan is to drive the share price down to an irrecoverable level until the business goes toes up...then not only do they not have to cover, there's no record of them buying, so the sale doesn't get taxed!