While most investors like to look for bubbles in stocks that Wall Street is hyping on the upside, most don't realize it can work the other way around as well.
But just as a market bubble can burst when there are no more buyers, a short-seller bubble can burst when there are no more sellers. You see, all the investors who borrowed the shares must buy them back at some point. If the company catches some good news, or at least less bad news as expected, then the short-sellers may not be able to find willing sellers without offering higher prices. This phenomenon is known as a short squeeze. (more)
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