https://www.cnn.com/2021/01/27/politics/gamestop-stock-surge...
https://www.cnn.com/2021/01/27/politics/gamestop-stock-surge...
This article somehow missed the abnormal part where there were more short positions than shares in circulation. It's like doing fractional reserve banking with stocks except without any regulations. A short squeeze is just a bank run with this analogy. This does not happen all the time. It's entirely dependent on those who kept shorting the stock without making sure that they can cover their shorts.
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Matt Levine: "Every day people email me to say “I don’t understand how more than 100% of a company’s shares can be shorted, isn’t that illegal?” No, it is fine. I wrote about it on Monday"
My previous comment quoting his previous footnote on the same thing: https://news.ycombinator.com/item?id=25935959