If most investers sell short to one stock, what happen to that stock? It will go down.
Actually no. In the absence of serious negative news, short sellers, even massive ones, merely depress the upward motion. Unless the stock is fundamentally weak and produces disappointments with earnings, the short sellers by over selling set themselves up for a massive squeeze and explosive upside volatility.
Think 2003/2004 housing prices. When the shorts need to stop shorting, there’s inadequate volume to meet the demand in the market place.
