Comment by samblogs

Regulations (https://www.investopedia.com/terms/r/regsho.asp) exist to prevent more shares being shorted than exist. However, those lending out shares to be used in a short can demand them back. Also, banks might demand you put up more capital as a stock you shorted increased in value. But I wanted to clarify that there are regulations such that you can't short a stock out of thin air, the stock you're shorting must be "located". Making shorting completely illegal would likely lead to irrationally high values in the market, creating more bubbles like this one.