I remember watching this live as it happened, it was fantastic. Reporting requirements of regulated exchanges should make scenarios like these impossible, but Porsche found a loop hole and squeezed the shorts.<p>Relevant section:<p><i>With 12 per cent of the shares outstanding sold short, it was mathematically impossible for every short-seller to buy a share, and therefore close their position.</i><p><i>In other words, half the room were going to be left in a burning building with no way out. A panicked dash for the exit began.</i><p>Edit: for context, I was working for a bank at the time, and implemented the procedure that monitored holdings for the limits above/which reporting requirements would be triggered. The rules are quite extensive, and it was an incredible feat to gain control over such a large share of VW stock without violating any of the actual rules.
If you enjoyed this you may also enjoy reading about Piggly Wiggly: <a href="https://www.newyorker.com/magazine/1959/06/06/a-corner-in-piggly-wiggly/amp" rel="nofollow">https://www.newyorker.com/magazine/1959/06/06/a-corner-in-pi...</a>
That sounds awesome. Is there a version of the story that doesn't demand personal info to read it? This site wants me to enter info about my career and job title before I can view anything.
this is a fascinating read! - I do have a basic question: when do short sellers realize that the total outstanding shares are not enough to close position - or the assumption is that the same share can be used to settle multiple shorts at different times? thanks, HN!
> The thing to learn [from the short-squeeze] is that, it's such a rare experience and special case, we should not overreact.<p>One of my favorite points from “The Black Swan” is how Taleb points out that the few biggest market-moving days make up all the action in the market; the days in between are close to noise.<p>This is also a bit like saying after a car crash “this is such a rare event, all the other times I drove I didn’t crash. So let’s not get too hasty here”