I know little about HFT, HFQ or HFW(hatever). But if an algorithm is many a company worth $5 dollars $1 dollar, it's based on a future dividend pay. So the computer is gifting you privilege to pay $1 for a return that should have cost you $5. Assume the opposite scenario, where it should be woth $5 and and it went to $10. Now suppose you own the stock, which will have a return double of what it should have. (now you need $2 for every %dividend that it shields). So you can sell for $10 what truly was worth only $5. Now suppose you don't own the stock and it's just making its price inflated, Buy a put at $7 with a 6 month expiration and way. But that wont likely happen, they company would sell it's own stock, as would anyone that saw that their $5 turned $10 undeservedly. Or the company itself would float more shares (but who'd buy that). Getting $10 for something worth $5 is good business regardless of who cashes it. And doesn't last long because no HFT or hedge fund would survive by doing that.
Another different thing is naked short selling. I think it should be banned (if it's not done already) Actually, any short selling should be banned (as I understand it). Basically, it can enforce a lower price by generating bearish pressure for a sustained time, until actorrs convince themselves the market knows best. Since the company may have their cost of capital affected by their stock value, it can create situation where the company profitability, market credibility, bargaining power and overall brand may be affected in real life, just because of the short selling effect. This is unethical, wrong and dangerous.
A analogy, suppose you sell lemons, and that after a day, they expire (no longer fresh). You go to the market and offer them for the fair price of $5. No a short seller has this awesome idea of selling lemons they don't have -with the promise to deliver them later, for the exact quantity that you brought to market that day. You had 50 lemons. And the short seller offers $4 for 50 lemons, exhausting demand. The lemon seller will wait until the end of the day, and realize there's not market at $5. Nor $4. Nor $1. And a mistery shopper now offers $0.5 for 50 lemons. The short seller gets the lemon for $0.5, and deliver them for $4 with amazing margin. The one that harvested the lemons gets a huge loss.
This happens to company that typically fond themselves needing to repay debt. If their stock falls significantly (eg. short selling), then a lot of shareholder value is lost because they must issue much more (bringing the price further down). After this is done, it's only been a transfer to the short seller with no additional function or value to the market. A pure brute force game on trading what you don't and have never owned.