10 Biggest Short Squeezes in History, From 1863 to 2021

By price spike, the biggest short squeeze in history is Volkswagen in October 2008: after Porsche revealed its takeover plan, the shares jumped from €211 to more than €1,005 in two trading days and briefly made VW the most valuable listed company in the world. By money lost, Tesla shorts hold the record, with $40.1 billion of paper losses in 2020. GameStop in January 2021, when the close rose more than 1,600% in about two weeks, and Northern Pacific in May 1901, when shorts paid $1,000 a share, are the other landmark cases.

The ten cases below run from 1863 to 2021, in date order. For each one we give the documented price move, who was squeezed and how it ended, with the regulator, court, academic or press source behind every figure.

What a short squeeze is

A short seller borrows shares, sells them and hopes to buy them back cheaper. If the price rises instead, losses grow with no ceiling, margin calls arrive and some shorts buy to close their positions. That buying pushes the price higher, which forces more shorts to cover. The SEC staff describes the mechanism the same way in its report on early 2021: buy-to-cover volume that raises the price and leads to further buying to cover. The ten cases below combine, in different doses, three ingredients: heavy short interest, few shares available to buy, and a trigger that surprises the shorts.

The 10 squeezes at a glance

1. Harlem Railroad, 1863

Cornelius Vanderbilt bought a large part of the New York and Harlem railroad, which took the stock from $10 a share to par. Speculators then sold it for future delivery, expecting the city to cancel a Broadway streetcar franchise and the price to collapse. Vanderbilt bought every share offered; the sellers could only deliver by paying him double the prices they had agreed. Vanderbilt died in 1877.

2. Northern Pacific, May 1901

From Monday, May 6, 1901, two camps, one backed by the Kuhn, Loeb bank and the other by the Morgan bank, bought Northern Pacific shares to win control of the railroad. Much of the stock they bought had been sold short. When the short sellers realized there were not enough shares to buy back, panic swept the Street: one broker sold 300 shares to a short at $1,000 each, ten times the price a week earlier. The two banks called a hasty truce that let the shorts settle at $150 a share.

3. Piggly Wiggly, 1923

Clarence Saunders, who opened the first Piggly Wiggly store in 1916, answered a bear campaign against his company's stock by trying to corner it. According to a 1929 Time account, he drove the price from about $40 to above $120 a share, until the exchange's governors ruled that a corner existed and suspended trading in the spring of 1923. With no market for his shares, the corner failed and cost him millions; he resigned from Piggly Wiggly and filed for bankruptcy. Saunders died in 1953. The case shows that the squeezer can lose too.

4. Reliance Industries, 1982

In 1982 a bear syndicate in Calcutta sold short 11 lakh Reliance shares, worth Rs 16 crore. Brokers allied with Reliance kept buying and, on the clearing day of April 30, refused to let the shorts postpone delivery, asking Rs 50 a share for any delay. The stock had risen from about Rs 125 in March to about Rs 202 in April, and the Bombay exchange had to close for two days.

5. Volkswagen, October 2008

On Sunday, October 26, 2008, Porsche announced a largely unexpected plan to take over Volkswagen. By selling cash-settled put options, it had, in the words of a Harvard Law School Forum analysis, "effectively insured more than 50% of the voting stock of VW" against falling prices. The free float shrank significantly, and short sellers found it increasingly difficult to buy shares to cover. The stock went from €211 at the Friday close to more than €1,005 on Tuesday, October 28, briefly making VW the most valuable listed company in the world, and short sellers' losses were estimated at more than €20 billion.

Porsche's own release that Sunday gave the numbers: 42.6% of the ordinary shares held and cash-settled options on another 31.5%, 74.1% in total. With the state of Lower Saxony's stake of more than 20%, less than 6% of the ordinary shares were left for everyone else, short sellers included. Our page on the infinity short squeeze follows that chain step by step.

Four of the first five cases give prices or multiples, not percentages, so the chart converts them: from €211 to €1,005 for Volkswagen, about $40 to above $120 for Piggly Wiggly, about Rs 125 to Rs 202 for Reliance, and ten times the price of a week earlier for the Northern Pacific sale at $1,000. Harlem Railroad has no price at the squeeze in our sources and gets no bar. The windows differ, from two sessions to two months, so the bars compare the size of each move, not its speed.

6. Herbalife, 2012 to 2018

On December 19, 2012, Bill Ackman's $1 billion bet against Herbalife became public, and he presented his case that it was a pyramid scheme the next day. Instead of falling, the stock climbed. Herbalife reached a $200 million settlement with the FTC in July 2016 that required it to restructure, but the shares kept rising. When Ackman almost entirely exited on February 28, 2018, the stock had more than doubled and hit a record $95.93. This was a slow squeeze: years of rising prices rather than a few days.

7. KaloBios, November 2015

On November 13, 2015, KaloBios said it would wind down and liquidate. A group led by Martin Shkreli then bought a majority stake and the shares rose from about $1 to as high as $40. On November 27, Shkreli said he would stop lending his shares to short sellers, and the stock jumped another 29% as shorts scrambled to cover. Shkreli later spent more than four years in prison for defrauding investors.

8. Tesla, 2020

Tesla shares rose 743% during 2020. According to S3 Partners, short sellers lost a record $40.1 billion on paper over the year, more than the combined short losses of the next nine companies. No single day caused it: the record came from a year of steady gains rather than a spike.

9. GameStop, January 2021

GameStop's short interest reached 122.97% of its float in January 2021. The price rose sharply from January 13, closed at a high of $347.51 on January 27, more than 1,600% above its January 11 close, reached an intraday high of $483.00 the next day, and the intraday price rose about 2,700% from January 8 to January 28 before falling more than 86% by early February. The SEC staff found that short covering contributed to some sharp rises, but concluded that it was "the positive sentiment, not the buying-to-cover" that sustained the rally. Melvin Capital, one of the short sellers, lost about $7 billion of capital that month; its story is on our list of the worst hedge fund losses.

The modern cases publish their moves as percentages: more than 1,600% for GameStop between the January 11 and January 27 closes, 301.2% in one day for AMC (SEC staff report), 743% over 2020 for Tesla (CNN, citing S3 Partners), and more than a doubling over five years for Herbalife (Fortune).

10. AMC Entertainment, January 2021

AMC, the cinema chain, rose 301.2% in one day on January 27, 2021, a bigger one-day move than any GameStop session. Its short interest was only 11.4% of the float, which shows that a meme rally can lift a stock even without a large short position to squeeze. The SEC staff gives the usual range for comparison: short interest is often below 2.5% for large non-financial stocks and below 13% for small ones. On January 28 several brokers restricted purchases of AMC and GameStop.

Signals the ten cases have in common

For the mechanics, read our guides to short covering, the gamma squeeze driven by options hedging, the infinity short squeeze of the Volkswagen kind, and the mirror case of the long squeeze. The traders who stood on the right side of famous trades are profiled in our list of the most successful stock traders, and more market history is in our famous traders section.