This is a fundamental misunderstanding, as @matt_levine explained a couple times in his newsletter last week. When the short interest grows, so necessarily does the long interest, because *two* investors are long any share that is sold short.
https://twitter.com/combszack/status/1354985814120394753
A higher short interest puts the short sellers at more risk, for sure, but there’s nothing special about the line where you go over 100% of the shares outstanding.
Adam wants to sell short, so he borrows a share from Bob to sell to Christine. Now Bob and Christine are both long the same share. When Bob is squeezed and has to exit his short position, maybe he buys from Christine. That still leaves Bob long.
Sorry, two bits of errata on this thread: Adam gets squeezed, not Bob; and Matt Levine's explanations were this week (Monday and Thursday) not last week.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
