The way I understand it (and I am no financial expert by any means so if someone knows better please correct me) is this:
Stock shorting is Wall Street companies and hedge funds "borrowing" stocks at a set price, agreeing to pay the stock "lender" at a later date. They then wait until the company's value is very low and pay pennies on the dollar making reams of money.
Well people on r/wallstreetbets decided to start buying GameStop stock and driving the price sky high. All these hedge funders with large holdings in these short sale now owe people hundreds of dollars per share while the stock they were holding was purchased at a very low rate leading these hedge funds billions of dollars in debt and on the verge of being financially insolvent.
The way I understand it (and I am no financial expert by any means so if someone knows better please correct me) is this:
Stock shorting is Wall Street companies and hedge funds "borrowing" stocks at a set price, agreeing to pay the stock "lender" at a later date. They then wait until the company's value is very low and pay pennies on the dollar making reams of money.
Well people on r/wallstreetbets decided to start buying GameStop stock and driving the price sky high. All these hedge funders with large holdings in these short sale now owe people hundreds of dollars per share while the stock they were holding was purchased at a very low rate leading these hedge funds billions of dollars in debt and on the verge of being financially insolvent.