There was huge short selling in Escorts on Friday on rumors of promoter / large well known investor selling. The rumor resulted in huge short selling. The rumor is wrong. . The seller was not company insiders but the company itself. What got sold was treasury shares. The 250cr odd would flow into the company, not to the promoters or anyone else. It is similar to fund raising by a corporate. The cash will be potentially used to fund an acquisition in the Railway business which the company has guided already. This is actually a positive step - treasury stock used for raising cash which the markets were not valuing at all and it provides visibility to railway expansion plans.

Short selling on wrong news when the development is actually positive.