You don't understand basic stock market finance do you? An investor would do backflips if some company with a good balance sheet, positive cash flow & Earnings gets naked shorted into the ground. It means he can buy up the float of a company for dirt cheap and make huge profits. That's why only piece of crap companies that have no future and only surivive on hype get naked shorted.
Actually, stocks ARE ACTUALLY valued on their prospects for future profits (or losses). Stocks like XOM and WMT are profitable, are expected to remain profitable and expected to do at least "okay" going forward vs. the general market. Hence no so-called "bear raids" in these names. The stocks that have been victims of so-called "bear raids" have been losing a lot of money and - more important - have very shaky outlooks regarding their future profitability. This subprime stuff used to make them a lot of money. Now it is costing them. How are they going to stop the current bleeding? The answer is unclear. Once they finally figure out an answer to the above - How are they going to replace the revenue and profits that they used to earn from their subprime activities? This answer is very very unclear. How do you value a stock with these issues? Generally, lower. And lower. And lower - until the answers become more clear. How many times have you heard Mr. Robert Pisani blurt out "The Market HATES Uncertainty" ... ? Probably the only thing he tends to be consistently right about. The uncertainty in these names is huge. There not much to love and quite a bit to hate, at this point, for any investor who hates uncertainty. Anyway, that's how stocks are "conventionally" valued. BTW - Excellent post by Mr. Keith Omalley. The sell-offs detailed in the studies cited in his post all dovetail with conventional stock valuation.