AlphaNinja - Short sellers (betting on a stock going down in price) employ many different strategies. Some short the stocks of great companies that might simply be overpriced, like JCrew or Monsanto. Others short stocks that they consider to be "ZEROS," or companies that they are convinced are going bankrupt, sending the shares to 0. That's the only way you can be comfortable shorting stocks that are trading below $1.
Shares of Gray Television (GTN) are decimating shorts today, up 43% or 28cents! In fairness, no one in their right mind would make this a massive percent of their overall portfolio, so this is probably hurting certain funds no more than 1-2% today at worst.
Why it's up is anyone's guess. It could be a short squeeze, or an effort by longs to get the stock to the important 1.00 level, a level the NYSE is keeping an eye on:
GTN has seen 6.2million shares traded already today in 3hours, and the NYSE asked the company to explain. Gray Television had no comment.