The daily short selling data is meaningless. It mostly derives from the way the market makers operate. When a buy order comes in, they make sure that shares are available, then they sell the shares first (technically a short sale), and then buy the shares to cover. So even though it was never intended to be a short sale, and it is covered essentially immediately, it is reported as a "short sale". In actuality, it is almost impossible to legally short penny stocks- ask your broker about it. If they even allow it, the margin requirements are astronomical (one broker requires $2.50 in your account for each penny share shorted). Naked shorting, on the other hand, is a real problem, but since it doesn't show up in the reports, it is impossible to tell specifically what stocks are targeted without a lot of forensic accounting work.