I wasn’t watching the market in 2008 as closely as I do today, so I didn’t observe the legendary Volkswagen Short Squeeze in real time. I have been watching the insanity in GameStop (GME), however, and it is jaw-dropping. This is a stock was was less than $3 only nine months ago, and it got up to about $140 this morning based on nothing but squeezing the everlovin’ life out of the bears, led by a merciless /reddit army.
The daily chart below gives you some idea how rapid this has been. I want to stress this doesn’t even include pre-market action, since I am typing this before the opening bell.
I read that the sales short short is greater than the float (how is that even possible?) so clearly this is pure psychology at this point: one by one, GME bears are going to scream out in pain and buy to cover, just to make the agony stop. Once the ceases, whether it’s at $140 or at $2,000, it will be a total free-fall, since quite clearly the fundamentals of the company aren’t exactly being represented by recent market action.
Oh, and for a bit of historical context, this was the aftermath of the Volkswagen short squeeze: