At that point, the stock is worthless and the borrower doesn't have to return it... | Hacker News

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		gmiller123456 on March 11, 2023 \| parent \| context \| favorite \| on: A SVB short seller explains red flags he saw month... At that point, the stock is worthless and the borrower doesn't have to return it. They keep all of the money from the initial sale.

eru on March 12, 2023 [–]

It's a bit more complicated.

Companies are often in limbo for a long time before they officially go under.

The borrower has to keep paying borrow costs during that time. Which makes shorting companies that go down rather risky.

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