I see the nimrods posting "Shorts are getting squeezed!" or some such tripe almost 24/7 on every board. Yet, I cannot think of any big examples where shorts actually got caught and slaughtered.
Yeah, not every short sale works, but I can't think of any concerted effort that successfully busted the shorts.
Prosche, in an attempt to take over the carmaker has engineered a shortage of common shares by gobbling up as much as 75% of the company via options. The counter parties to these options went long the actual stock to hedge their exposure, leaving the shorts scrambling for shares to buy back.
Volkswagen Overtakes Exxon as Most Valuable Company (Update1): “Volkswagen AG became the world's biggest company by market value after Porsche SE announced plans to raise its stake in the German carmaker to 75 percent, triggering demand from short-sellers.
Volkswagen rose as much as 485.01 euros, or 93 percent, to 1,005.01 euros and was up 55 percent as of 11:10 a.m. in Frankfurt trading. Wolfsburg, Germany-based Volkswagen has risen more than fivefold this year and at its intraday peak was valued at 296 billion euros ($370 billion), more than Exxon Mobil Corp.'s $343 billion market value at yesterday's closing price in New York, according to data compiled by Bloomberg.
I don't know if you are limiting this to WFC, but I saw it happen big time in AAPL. I bought at $81, all the shorts said it was going to $60, I sold a few weeks later at $102, hasn't reached $81 since.
Shorts get squeezed all the time. You see, when a long gets burnt, he/she loses 50% or more. Maybe they hold all the way to zero. Dang, they lost everything.
But, when a short gets whacked, they might lose 50%, such as those that shorted at $8, thinking they were holding another BAC or C. They might still be holding that short when WFC goes to 16! Now they are down 100%. What happens when the stock goes to 20? 25? Don't think it can't happen and don't think it hasn't happened before! Short squeezes happen all of the time and many of them don't happen as nicely as a long holding to zero!
Don't mean to be an old foggy; however, when the market took off in 1982 after doing nothing for a decade. There was a bloodbath of shorts to match the collapse this past year. Noone could believe the power of that market.