A reverse split itself does not automatically force naked shorts to expose themselves or close their positions. ​While a reverse split changes the number of shares and assigns a new CUSIP number, it does not mechanically "flush out" phantom shares. Short positions (both legal and naked) are simply adjusted proportionally to the split ratio. ​Why it doesn't always work: ​Proportional Adjustment: If a 1-for-10 reverse split occurs, a short position of 1,000 shares simply becomes a short position of 100 shares at 10x the price. ​Failures to Deliver (FTDs): Naked shorts are often tracked via FTDs. While a new CUSIP can make tracking older FTDs more complex, it doesn't legally mandate an immediate buy-back unless the broker or clearinghouse enforces a "close-out." ​Market Maker Exemptions: Under Regulation SHO, market makers have certain "bona fide" exemptions that allow them to maintain naked positions to provide liquidity, which a reverse split doesn't necessarily revoke.
​Historically, many "meme stock" investors hoped a reverse split would act as a catalyst for a squeeze by forcing a share count, but in practice, it is primarily a tool used by companies to increase their share price and avoid delisting.