158 upvotes, 2 direct replies (showing 2)
Porsche was r/wallstreetbets in that scenario. Institutions had massively over-shorted VW. Porsche noticed and bought 74% of the available VW stock, creating a "short squeeze" situation because the short sellers *had to* buy VW stock. Porsche also knew that 17% of VW's stock was owned by a government index fund that could not sell it, so Porsche actually held about 90% of the tradeable VW shares, at a time when institutional investors were going to have to buy a ton of those shares to close out their short positions. Porsche asked for a high price and the short sellers had to pay it, netting Porsche a huge profit.
It was called an "infinity squeeze" because Porsche theoretically could have asked for an infinitely high price for the shares, since the number of shares the institutions had to buy was more than the number of shares held by anyone other than Porsche.
Comment by Dwingledork at 28/01/2021 at 05:16 UTC
3 upvotes, 1 direct replies
Do you know what was the price of the stock?
Comment by BrightPerspective at 30/01/2021 at 06:23 UTC
1 upvotes, 0 direct replies
Hmm...is there a way to reproduce this effect? And...squeeze the 1% infinitely?