Yes, that is the whole point of the markets in fact and the reason we allow short-selling. You want information from both sides to be incorporated because it will give you much better price discovery. You want people to figure out that companies are frauds and to tell the world about it and to get people to do that you incentivize them financially by allowing them to go short.

Look at recent private fundraising and VC to see what can happen in markets with no short selling.