Gamestop is a good example of why shorting companies is risky. Gamestop, a retail brick and mortar business is an obvious candidate to short. Games are downloaded these days, not bought in stores, and amazon sells everything else like consoles. So it will go the way of blockbuster. So, great short, right? Well, they got a new CEO and he started making all the right noises. Hey, we're going to transition to be an on-line powerhouse! We will be the go to place to buy downloadable games! Don't worry about our stores, we'll figure something out...
Anyways, the stock price had been beaten down so low, that any bit of good news caused the price to rebound. (When shorting, never short near a low!!!). Gamestop was never a very liquid stock, so ... short squeeze! 69% today was nothing. It has gone up 12x since the lows...
Personally, I hate shorting, so, yeah, you get what you deserve!
Anyways, the stock price had been beaten down so low, that any bit of good news caused the price to rebound. (When shorting, never short near a low!!!). Gamestop was never a very liquid stock, so ... short squeeze! 69% today was nothing. It has gone up 12x since the lows...
Personally, I hate shorting, so, yeah, you get what you deserve!