[satanic_pope]

Someone educate me but why are hedge funds not limiting the loss by covering the short and closing their short position. Wouldn't that stop pumping from WSB crowd?

The only exceptions I could think of is :

- There isn't enough volume to cover shorts due to incessant buying spree from retail side

- Lending freeze initiated by brokers on client request

[JustFinishedBSG]

They can't cover their position because their position is 140% of the available shares...

[bo1024]

I think this wording may be a bit misleading. I think the challenge is more subtle, let me walk through a scenario.

100 shares exist, all owned by person A. They lend all the shares to a short-seller, who sells them to B. Then B lends 40 of those shares back to the short seller, who sells them to C.

Now 140% of existing shares are shorted. But 240 shares are "owned" in some sense. A "owns" 100 shares and B "owns" 100 shares and C "owns" 40 shares.

What's not clear to me is which of these shares are available to be bought by the short seller. I assume you can't sell your shares if they're loaned out. So the short seller can first buy 40 shares from C and deliver to B. Then he has to buy 100 from B, including the shares he just delivered, and give them all to A.

[bo1024]

My understanding is not enough volume. So many shares are sold short that attempting to buy a significant portion back would drive up prices and initiate the short squeeze (vicious cycle of price going up and shorts forced to buy more shares to cover).

[trident5000]

They're too stubborn to take a loss and theres not even enough shares for them to all cover. Its also not really the case that none of them have covered. People close out and then new short sellers come in at the same time taking their place, thinking this is their time and surely it will go down, which keeps the short to available shares high.

[fock]

But couldn't they just settle with the original lenders without buying back the stock from the actual holders? Or is that forbidden? To me this would seem a logical decision for any lender (the business was not dead, so selling was a little bit too risky, but now taking a 100% profit and being done with that instead of having a stupidly inflated stock and 10% profits in the, seems reasonable)

[SpicyLemonZest]

The big pumping has only happened over the last few days. Hedge funds are starting to close their short positions (two of the most noted ones Melvin and Citron announced they had just this morning), and many commentators do expect that this will cause the stock to crash soon as people move on.

[bpodgursky]

Not to tinfoil this too much, but it seems pretty likely from volume that that was a lie by Melvin and Citron, with the explicit goal of tanking the stock (so they can then cover at a lower price).

[andrethegiant]

They announced they closed outside of trading hours, which makes me think they didn't actually close. Why wouldn't they announce at the close yesterday to prevent the run up to 300?

[kemiller2002]

Am I correct in saying that if someone can forecast approximately when that will happen, they can short the stock and make money off of the mass selloff? Essentially putting the short sellers back where they started (in a sense)?

[anthonypasq]

they arent closing their short position because they think the price is going to go back down and they wont get massacred as badly.

so WSB keeps buying to screw them for having so little faith :)