Thanks I think I get it. It sounds a bit complicated but that does put it simply. I guess the idea is that if you know a stock is going to go down, or you think you can MAKE it go down (bad publicity etc), then you are at an advantage to do this? So it's a way to profit from a stock going down, while otherwise you would be losing if you simply bought it through a normal trade.
Yes. If you think it is going to go down, you might be able to short it and profit. On the surface it sounds like an evil vulture move: profiting from the price of something going down. But what it usually does is have people sell when prices are artificially too high (lowering the big peaks) and buy when stocks are down (rising the valleys). The only way for a short to be profitable is to buy when the price is low.
In other words, it is the shorts that are buying when the stock needs buyers the most. Shorting tends to keep prices more steady than without shorts.
Making the price of something go down with bad publicity is a grey area. If anything you do is misleading, false, or even exaggerated, that is illegal and massive fines are given out. Shorting can be abused. That abuse or even appearance of abuse is quite problematic.
I have shorted one thing in my life: silver. When silver was over $40/ounce, I sold it. Then when it was $20/ounce I bought it. I did this 3 times (different price levels though). It was profitable for me to do that and I haven't done any shorting in years. Shorting can be very dangerous, as losses when shorting something can be massive.