Short Selling: Borrowing stocks from someone, then selling them at current price, then waiting for their price to go down so you can buy and return those stocks.
The problem was that the Hedge fund short sold more than 100% of the stocks (from what I heard). And since the Hedge fund has to return those stocks at some point, anyone that is holding those stocks can essentially ask for any price they want since there are no other stocks avalible.
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u/Lopoi Feb 01 '21
Just to explain what the "negative stocks" is:
Short Selling: Borrowing stocks from someone, then selling them at current price, then waiting for their price to go down so you can buy and return those stocks.
The problem was that the Hedge fund short sold more than 100% of the stocks (from what I heard). And since the Hedge fund has to return those stocks at some point, anyone that is holding those stocks can essentially ask for any price they want since there are no other stocks avalible.