I had first hand experience with this in the early 2000s with CMRC (stock symbol for a company named Commerce One). Friends and I were confident it was overval

I had first hand experience with this in the early 2000s with CMRC (stock symbol for a company named Commerce One). Friends and I were confident it was overvalued and shorted it, but it continued up at an insane clip and we got margin calls from our brokers. Luckily we were able scrounge up enough cash to cover it and so didn't have to buy the stock at the higher price to cover, and I think within a few days it started to fall again and we were able to settle at a profit, but it was pretty white knuckle. Note that there was no business reason for the rapid gain, they didn't announce a sudden windfall, it was just a short squeeze. Company was never profitable and went bankrupt a few years later despite having a market cap that peaked at over $20BN. https://en.wikipedia.org/wiki/Commerce_One https://en.wikipedia.org/wiki/Commerce_One