Well that's wrong analogy. The right analogy would be if you borrowed a pizza from your mate and sold it to someone.

> Is this fraud?

No because they have the raw materials and labour to make a new pizza and have entered into a contract to do so.

Short sellers don't have raw materials to make new shares.

How about if I sell a million pizzas to be delivered next month then put out articles about how Dominos has poison in their pizzas! People will forget or won't want the order and I will pocket the money. These short sellers are a scam.

That's a completely unrelated hypothetical (and also, would be illegal fraud).

There's nothing special about shorting in your imaginary scenario either. You could change your scam to "I own Dominos stock and don't order any pizzas, but I put out articles claiming I ordered a million. People will buy up the stock expecting the profits from the million-pizza-order and I will pocket the money. These long holders are a scam"

If your intel if wrong people will see it and you're done. Short reports can be true or false, so can bullish reports. Its hoped that the truth wins out in any case. I don't see the scam here.