Prosche agreed to cash-settle the short sellers which sky rocketed the price. A painful squeeze on short sellers Volkswagen was briefly the most valuable company in the world this week because short sellers made the wrong bet. Am 26. You need not be a financial wizard to tell that it is a way too high short interest for any company. "The short squeeze was released on 29 October 2008 when Porsche agreed to cash-settle sufficient options for the short sellers to close out their positions." A short squeeze for Volkswagen occurs when it has a large amount of short interest and its stock increases in price. Ein Beispiel für einen Short Squeeze ist die Kursexplosion der Volkswagen-Stammaktie, die am 27. At its peak, 140 percent of GME shares were sold short. The case intends to explain this apparent marketplace distortion using Here's the daily chart showing how it ran up for two days, dropped massively on the third day, then was all the way back down to where it began on the sixth day. The result of the current short squeeze could be increased regulations over retail traders. Most squeezes are more rudimentary … This is known as a “short squeeze”. The last major short squeeze that happened was to Volkswagon in 2008. The short squeeze was so intense that Volkswagen briefly became the world’s most valuable company. THE VOLKSWAGEN SHORT SQUEEZE Case Solution,THE VOLKSWAGEN SHORT SQUEEZE Case Analysis, THE VOLKSWAGEN SHORT SQUEEZE Case Study Solution, On 28 October 2008, the price of Volkswagen common shares surpassed EUR1,000. The greatest short squeezes pretty much originate when a person or group attempts to corner the market. Oktober 2008 hatte das Unternehmen Porsche bekannt gegeben, dass es seinen Anteil an VW von 35 % auf 42,6 % erhöht hätte und mit Optionen auf weitere 31,5 % über einen Gesamtanteil von 74,1 % verfügen würde. ... A quick look at the stock prices … Oktober 2008 begann. This forces short sellers to cover their short interest positions by buying actual shares of VWAGY, which in turn drives the price of the stock up even further. Then people who had shorted Volkswagen stock had to buy it back to repay it to the people they had borrowed from driving the price up even further. The end result was that for one day in the midst of chaos Volkswagen was the most valuable company in the world. Market Insider is a business news aggregator for traders and investors that proposes to you the latest financial markets news, top stories headlines and trading analysis on stock market, currencies (Forex), cryptocurrency, commodities futures, ETFs … What is Market Insider? In 2008, Porsche gobbled up so much Volkswagen's stock it caused VW's stock prices to soar, which similarly caused short sellers to lose tens of billions of dollars in a span of a couple days. A short squeeze occurs when there is a lack of supply and an excess of demand for the stock due to short sellers having to buy stocks to cover their short positions. GME was an epic short squeeze. [1] Chart showing the price movement and volume during the 2008 short squeeze of Volkswagen shares.
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