No. That's not how markets work. If shorts can't cover their brokers will liquidate the position and then go after them for the shortfall.
We should have listened...
Goldman Sachs downgraded MannKind Corporation (NASDAQ: MNKD) to a Sell from Neutral, noting that the risk/reward ratio from selling the stock is 55 percent to the downside versus just 5 percent to the upside. The analysts placed a price target of $3 on the shares, which closed Monday at $6.64.
The stock was recently down 11 percent at $5.88.
Goldman Sachs said that the biotech company's diabetes product's launch will be slower than expected with the firm also experiencing "more difficult pricing." Therefore, the analysts pegged 2019-2021 EPS at a 30 percent discount to consensus estimates, leading them to the $3 price target.
Related Link: MannKind's Short Interest Has 'Grown High,' Analyst Says
Most concerning, the analysts said, was MannKind's launch of Afrezza, which has "fallen short of our expectations." The analysts halved Afrezza's sales targets to $1 billion in 2025. Simultaneously, other recent diabetes products have fallen 75 percent short of Goldman Sachs estimates, leading the firm to conclude that Afrezza's initial hiccups are not temporary.