To play devil's advocate... maybe shorting stocks is actually a sensible way to fund activism against unethical companies. It's not unprecedented. The "No win no fee" structure common in class action lawsuits is roughly equivalent.
If someone wanted to actually put this into practice, the thing to do would be to create a fund and identify several companies doing illegal things, short the stocks, and then launch campaigns against them.
I'm not sure if the math works out though. With traditional VC your wins are orders of magnitude larger than your losses, which is what allows the portfolio to succeed. I don't know enough about shorts to know whether a similar structure could be created.
If someone wanted to actually put this into practice, the thing to do would be to create a fund and identify several companies doing illegal things, short the stocks, and then launch campaigns against them.
I'm not sure if the math works out though. With traditional VC your wins are orders of magnitude larger than your losses, which is what allows the portfolio to succeed. I don't know enough about shorts to know whether a similar structure could be created.