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Here's how it works

You are a vile, piece of shit hedge fund manager and want to make money off a company failing. Say, widgets. But you don't own any stock in widgets. You borrow the stock from someone at, say $10. They give you the share of stock and you give them an IOU for one share of stock. You immediately sell that borrowed stock for $10 to someone else.

Here's the rub..... You now have $10 that is not really yours. You sit on it for a bit and when widget stock goes down to, say, $7 you take that $10 and buy a share of widget stock. You then pay back the person who gave you the initial share of stock. But you don't pay the $10, you pay with the share of stock that is now worth $7. You made $3 on that sale.

BUT, in this case, the borrowed shares INCREASED in value to, say, $15. So in order to pay back the borrowed share (which you got $10 for) You now have to pay $15 to pay that share back to the lender. You LOSE $5 in that transaction. That is what is happening now. Investors are jacking up the price of a stock and it is costing these hedge funds massive amounts of money to pay back.