Organized shorting can walk a stock down and hold it there for a while, but it's like holding the lid down on a pressure cooker. It will eventually seek equilibrium. Most often, it skyrockets as shorts have to cover, then settles back to a price based upon fundamentals and potential.
They have been “covering” their short positions for three years now, kicking the can down the road. But like you say, it’s eventually going to blow when they can no longer cover, and are forced to close their positions.
I’m not super knowledgeable on this, but I’ve read about how they use their long holdings (in Apple, Nvidia, etc) as collateral to cover their shorts. When the market hits the looming correction/crash and the value of those Blue Chip stocks falls, they will no longer be valuable enough to be used as collateral.
Organized shorting can walk a stock down and hold it there for a while, but it's like holding the lid down on a pressure cooker. It will eventually seek equilibrium. Most often, it skyrockets as shorts have to cover, then settles back to a price based upon fundamentals and potential.
They have been “covering” their short positions for three years now, kicking the can down the road. But like you say, it’s eventually going to blow when they can no longer cover, and are forced to close their positions.
I’m not super knowledgeable on this, but I’ve read about how they use their long holdings (in Apple, Nvidia, etc) as collateral to cover their shorts. When the market hits the looming correction/crash and the value of those Blue Chip stocks falls, they will no longer be valuable enough to be used as collateral.
I.e. buy moar now it’s on sale
Kek purple crayons taste best
And edit: "oh look, honey, it's like you always tell me- the more we buy, the more we save!"