United States short-sellers are out more than $70 billion on their short positions this year, according to Reuters, and at least $1 billion of that is the result of a Reddit-driven GameStop stock surge that, last week, saw shares of the video game retailer, a heavily shorted stock, skyrocket in price.
“The hefty losses come as shares of highly-shorted GameStop jumped more than 1,000% in the past week without a clear business reason, forcing short-sellers to buy back into the stock to cover potential losses — defined as a short-squeeze — while retail investors then piled in to benefit from the surge,” Reuters said.
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