Gamestop has been shorted lower and lower by big funds. It was then really cheap.

Public information shows there are more shorts on Gamestop than available shares of stock. In fact, there are also very few shares of stock available to buy.

When you short a stock, you essentially borrow a share and then sell it. You then have to give someone a share of stock back later. If the stock goes down, well then you can make money buy giving them a share that you bought for cheaper than the price of the initial stock.

Well because there aren't a lot of shares available, the Wallstreetbet people bought all the available shares on the market. Driving the stock up. So the shorting folks are now out money.

But not just the normal amount of losing money. They can't even get enough stocks form the market to provide a stock to get out of their short positions. The WSB people are holding onto the stocks and not putting them back into the market.

So now the shortsellers are having to pay interest on the stocks they owe while they can't pay back the stock they owe. So they can't close out their position until a share becomes available to buyn. Mean while, the stock price is rocketing upwards, because there is this huge demand for shares to pay back the short positions, plus the WSB people still buying some more positions to cause more squeeze.

edit: Someone has 5 cameras. You borrow one and sell it to someone because you expect cameras to be cheaper. You expect the someone to sell it because camera prices are going down and maybe they think they can buy it cheaper later, or maybe they just don't want a camera. But they don't sell it, they all hold on to it. No one else is selling their camera either. You owe your buddy a camera. People know you owe your buddy a camera and that no one has any for sell. Finally someone says, sure I"ll sell you my camera for double the price.

sort of that, but compounded a lot

Gamestop has been shorted lower and lower by big funds. It was then really cheap.

Public information shows there are more shorts on Gamestop than available shares of stock. In fact, there are also very few shares of stock available to buy.

When you short a stock, you essentially borrow a share and then sell it. You then have to give someone a share of stock back later. If the stock goes down, well then you can make money buy giving them a share that you bought for cheaper than the price of the initial stock.

Well because there aren't a lot of shares available, the Wallstreetbet people bought all the available shares on the market. Driving the stock up. So the shorting folks are now out money.

But not just the normal amount of losing money. They can't even get enough stocks form the market to provide a stock to get out of their short positions. The WSB people are holding onto the stocks and not putting them back into the market.

So now the shortsellers are having to pay interest on the stocks they owe while they can't pay back the stock they owe. So they can't close out their position until a share becomes available to buyn. Mean while, the stock price is rocketing upwards, because there is this huge demand for shares to pay back the short positions, plus the WSB people still buying some more positions to cause more squeeze.