It isn't intentional and it doesn't do that. Speculation can already be done with no tax consequences or profitable tax consequences when the thing you're selling to buy something else has had zero or negative value appreciation, and can also be done by borrowing money to speculate with and using the shares you can't sell as collateral for the loan. But that too is less efficient because, although the speculation is happening, now there are a bunch of wasteful transaction costs.
Also, long-term investors shouldn't care about short-term value swings, and short-term investors get what they paid for.
> Having the zombie company isn’t inefficient. That company is still deploying its capital to its employees and vendors, paying rent, etc. They are still contributing to the economy.
When one company is paying people to build technology to reduce carbon emissions and the other is paying people to dig holes and fill them back in for no reason or rearrange the deck chairs on a sinking ship, diverting capital to the second company is most certainly inefficient.
> Also remember companies aren’t making money from stock trades. They already got all the money at the IPO.
The IPO for some companies hasn't happened yet. Moreover, existing companies can sell new shares, and the company's market value is used to assuage creditors and allow existing companies to borrow at lower rates because the creditors know the company could pay the debt by issuing new shares if necessary.
Yes, it is. If the price drops, it becomes that much more feasible for an outsider to rescue it with a takeover bid - either way, the company will surely be viable as a going concern. You don't seem to be making a consistent argument here.
Obvious counterexamples to your logic: ETFs using heartbeats and foreign buyers can buy and sell without tax consequences in the US.
Having the zombie company isn’t inefficient. That company is still deploying its capital to its employees and vendors, paying rent, etc. They are still contributing to the economy.
Also remember companies aren’t making money from stock trades. They already got all the money at the IPO.