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Short sellers have two days to borrow and deliver shares, and if they don't do that, they can be subject to a buy-in (I think 3 days later) for failure to deliver. They don't really manage that back office stuff themselves; their prime brokers do. Shorts also have to pay a large amount of interest to remain short, because they are borrowing the shares that they sell. Indicatively, I see the short rate at around 12.5% annually. This is not terribly high. You can look at the short rate as a quick-and-dirty, but more granular across time, proxy for short interest. People are acting like GME is the only stock that has ever short squeezed. TSLA has squeezed repeatedly and its valuations have stayed high despite the company not turning a profit ex regulatory credits. We've already exceeded "reasonable" for GME so it's all a question of price action at this point. The main factor that makes GME's squeeze such a huge deal is that it was driven by a self-deprecating crowd of people sharing thoughts publicly, rather than some famous billionaire steering the money of several other famous billionaires. There's no law that says every trade has to be justified on a fundamental basis. Some people trade technicals. Others trade sentiment. Still others trade volatility. The price is the price. If BTC can go to 30k then GME can go to 1k. Another interesting factor is that, if short-sellers were reluctant to cover at $4, then there are bound to be many firms that are short stock (or long puts) here around $100. As long as there are shorts out there, it can squeeze again from shorts covering or market-makers hedging gamma. If nobody from WSB sells, then it's a question of the rest of the market participants (computers, market-makers, hedge funds, retail, you name it) pushing around the spot price. IMO it's a very interesting situation. We don't get FTD and short interest data very often -- bimonthly and on a lag -- so there's a lot of uncertainty. I share your genuine curiosity. |