Is it possible to make a company crash by massive shorting of the stock?

it's done every day thru naked shorting. the metals markets are totally upside down because of this often illegal practice.

No, not the shorting itself. The mechanism doesn't drive the price down.

But people that see a very large short position against a stock assume those people know something is wrong with the stock. Sometimes yes, sometimes no. That is what drives the price down.

And the truth is that shorting can be stabilizing as well. People can cover their stocks against losses by selling options against them.

That then there is the short covering rallies that drive stocks up faster and higher than normal when the market moves against the shorts.

In economics there is almost always a ying to every yang. For every action there is a reaction in the other direction.

The quick answer is definitely yes. Freakboy nailed it.

Now where's the proof? Naked shorting has been such a problem that the SEC came out with more regulations against it from March through September, 2008. It causes such a problem due to a downward manipulation of the stock that the entire Financial industry had to beg and plead the SEC ban all shorting of their stocks.

Had that not been done, a feeding frenzy would've occurred so rapidly by the hedge funds that by the time forensic accounting revealed who illegally naked shorted (insert any company name) that the company would've traded in the penny's. Bear Stearns is a fantastic example.

Look at the links below and start with the first one.

freakboy has no clue.

The reason the metals are down is because we're in a recession world wide and recessions always involves a drop in demand for basic materials like metals.

When a company sells stock to the public it gets money which it is free to use for its business. All subsequent trading in the stock is from one investor to another; the company is not involved (except in special cases where the company is buying the stock back). The ability to continue in business has nothing to do with the stock price since it doesn't have to give the money back.

Absolutely. Enron was a good example. Several mortgage REITs also fell victim and went all the way to worthless.

No.