I’m not a stock guy. It appears the ‘short sellers’ are creating a buy/sell frenzy to drive down the stock price so they can then sell their short positions at a profit while undermining the company’s value. Do I have that right?
they’re driving the stock down to destroy the company and MAGA. Shorts have to BUY to cover and that’s where they’re in a real pickle as they are mostly naked shorting, meaning they never identified shares they could borrow when they shorted so when this starts going up it’s going to rocket on them. they will have to buy at higher and higher prices to cover their short position.
As I understand the dynamic, a lot of short selling can benefit the investors who purchased the stock early. At some point, the short sellers must go into the market to buy shares to cover their short position. Their hope is that, by the time that happens, the stock price will have fallen and they can buy shares cheaply. The risk is that other short sellers will also be looking to buy the stock, which drives the price up.
From Wikipedia (see https://en.wikipedia.org/wiki/Short_squeeze for full article):
“Short squeezes result when short sellers of a stock move to cover their positions, purchasing large volumes of stock relative to the market volume. Purchasing the stock to cover their short positions raises the price of the shorted stock, thus triggering more short sellers to cover their positions by buying the stock; i.e., there is increasing demand. This dynamic can result in a cascade of stock purchases and an even bigger jump of the share price.[2][3] Borrow, buy and sell timing can lead to more than 100% of a company’s shares sold short.[4][5] This does not necessarily imply naked short selling, since shorted shares are put back onto the market, potentially allowing the same share to be borrowed multiple times.[6]
“Short squeezes tend to happen in stocks that have expensive borrow rates. Expensive borrow rates can increase the pressure on short sellers to cover their positions, further adding to the reflexive nature of this phenomenon.”
Many individuals and institutions want to short the DJT stock simply because they dislike Donald Trump. That raises the potential that, down the road, there could be a short squeeze that would send the price skyrocketing, as spacejunkie2001 wrote.
IMPORTANT CAVEAT: The foregoing is not investment advice. I’m just offering wild guesses based on what I read in the mass media. I, personally, am neither buying nor selling the stock. Good luck to those of you who do!