Squeezing shorts through social media platforms
File(s)
Accepted version
Author(s)
Allen, Franklin
Haas, Marlene
Eric, Nowak
Pirovano, Matteo
Tengulov, Angel
Type
Journal Article
Abstract
In January 2021, a group of stocks listed on US stock exchanges experienced sudden price increases, which – coupled with high short interest – led to short squeezes. We find that discussions on social media fueled the association between retail trading and subsequent stock returns. Options market activity and securities lending constraints also played a central role. Using unique data from social media platforms we provide a comprehensive account of these short squeezes. We find that they significantly impeded market quality for the stocks at issue and their competitors. Thus, the interplay between social media and retail traders may have adverse consequences for market quality and efficiency.
Date Issued
2025-12-15
Date Acceptance
2025-08-06
Citation
Management science, 2025
ISSN
0025-1909
Publisher
Institute for Operations Research and Management Sciences
Journal / Book Title
Management science
Copyright Statement
Copyright © 2025, INFORMS. This is the author’s accepted manuscript made available under a CC-BY licence in accordance with Imperial’s Research Publications Open Access policy (www.imperial.ac.uk/oa-policy)
License URL
Publication Status
Published online
Date Publish Online
2025-12-15