LONDON (Reuters Breakingviews) - Short-squeeze mania is...

LONDON (Reuters Breakingviews) - Short-squeeze mania is spreading. The strategy, favoured of late by U.S. retail traders, boosted heavily shorted European stocks on Wednesday. The immediate victims are bearish hedge funds who didn’t see it coming. But the squeezers themselves also risk overreaching.

Shares in Klepierre, Unibail-Rodamco-Westfield, Ambu and Pearson were up 13% on average by mid-morning. They’re among the most heavily shorted stocks in Europe, according to a list compiled for trading clients of a major investment bank seen by Breakingviews.It’s similar to a recent U.S. phenomenon, as exemplified by surging video-game retailer GameStop. Amateur traders, often coordinating through online message board Reddit, buy options in well-known shorts, forcing bank market makers to cover their position by purchasing the underlying shares. That pushes the price even higher, and eventually hedge funds who have sold the stock on loan have to buy to limit their losses. GameStop’s share price has roughly quadrupled in the past five days. It’s possible that some investors are now hopping on the same trend by snapping up shares in perennial shorts.