Those "new shares" issued are FROM the stock split.

What? You think there is a free lunch?

The way the shorts see it is exactly the same, before and after.

Mr. Short has a 10,000 share short position. Those were shares borrowed from Mr. Long.

Mr. Long gets 30,000 new shares at 1/4 the price, and his total position (40,000 shares long at 1/4 the price), in terms of dollars, is the same. Because now the shares trade on that "split-adjusted basis," which is 1/4 the price.

If Mr. Short was still short 10,000 shares at 1/4 the price, then that would be a 75% PROFIT to Mr. Short, overnight. You really think that's what the company is doing? Or, do you think that Mr. Short is now short 40,000 at 1/4 the price? Which makes more sense?

LOL.

Mr. Long AND Mr. Short are both in the SAME positions after the split/dividend as they were before.

Imagine being short 10,000 shares at $100 = $1,000,000 short. You have to pay back the 10,000 shares, NOT the $1,000,000. Then, the company does a split/dividend, and you are now short 10,000 shares at $25 = $250,000. What do you do? You IMMEDIATELY cover at $250,000 to cash out, and you have a fat profit of $750,000 on a $1,000,000 trade.

NICE!

But it don't work that way ...

If you think it does, then somebody is blowing smoke up your ass.