They have done studies upon studies on why bubbles pop and why even when stocks are obviously in a bubble, the stocks seem to stay overpriced for periods of time that are unexplainable. At the end of the day though, the bubble pops. The "unexplainable" aspect of the bubble is how the example stays so elevated for such an extended period of time. It remains unanswered. I believe it to be obvious collusion, but that is just me.
Stocks work by supply and demand. If there are x shares floating, and enough people by a decent enough percentage of x float, stock will move in the direction of those buying or selling such float.
Deckers was 50% shorted 12 months ago, stock went from 120-28/share. Stock is at 59/share today with a 35% float(short float is unwinding and they now must BUY back stock, thereby sending stock higher).
Lululemon still has more people buying float than shorting it, but short percentage is at 35% and will ONLY INCREASE as stock rises ridiculously and then KABOOM.
3.5B dollars is short this company right now. THAT IS SMART MONEY!
Yes but that becomes part of the problem the smart money on the other side wants to squeeze the shorts. It becomes more of market machinations and manipulation then having anything to do with the value of the stock/company.