The number of Twitter Inc. (NYSE: TWTR) shares sold short rose 17% to 55.2 million for the period that ended July 31. That was nearly 8% of the float. Recent quarterly numbers indicate that the number of people who use Twitter is actually shrinking.

Twitter’s second-quarter results were fine from a financial standpoint, but monthly active users dropped by a million from the prior quarter, down to 335 million. Even compared to a year ago, the figure was disappointing, up by just 9 million.

Twitter’s revenue rose 24% year over year for the second quarter to $711 million, which means the yield from its monthly active users is small. That raised the quandary of whether advertisers are willing to support the company, although the commitment of marketers did grow some, as demonstrated by the jump in revenue. However, Twitter has a revenue run rate of only $2.8 billion.

Twitter laid out the bad news in its letter to shareholders:

 Average MAUs were 335 million for Q2, an increase of 9 million year-over-year and a decrease of 1 million quarter-over-quarter, reflecting impact from decisions we have made to prioritize the health of the platform, to not move to paid SMS carrier relationships in certain markets and, to a lesser extent, GDPR. In aggregate, these factors reduced MAU by more than 3 million in Q2.

Thus, Twitter shuttered some accounts that it believed were suspicious and might be part of efforts to disseminate false information.

Twitter shareholders have punished the stock for the mismanagement. The value of the stock was up sharply this year, but in the past month, it has dropped nearly 30%. Consequently, some short sellers have made a lot of money.

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