This could go under the WallStreetBets entry or get its own entry. It's already immortalized internet lore and it's only going to get bigger.
To summarize:
Mid-2020: GameStock stock (from here on referred to by its ticker symbol, GME) was trading at about $5 per share. It had been declining in value for a while because of its outdated brick-and-mortar business model which was getting hammered by COVID. Analysts were giving it a price target as low as $1.50.
A couple of canny hedge fund managers and some autistic savants on WallStreetBets (most notably a guy by the handle of u/deepfuckingvalue) realized that GME was actually in a position to rapidly improve its business model and was therefore potentially undervalued.
Fast forward to around September 2020, GME's price begins climbing, hitting $10 in early October and $15 by late November.
Since analyst ratings from earlier in the year were still attached to the stock, it appeared to be in a speculative bubble. In response, a bunch of institutions (think Bank of America-type giants) began to short the stock. (Basically, shorting is effectively the opposite of buying. When you buy, you own the stock and can sell it later for a profit if the price goes up. When you short, you owe the stock and can buy it to cover your position later for a profit if the price goes down.)
Well it turns out that the price wasn't gonna go down. WallStreetBets rallied the troops and began hyping the stock in late 2020. The price began to pump, hitting $20 in December. Then in January 2021, all hell broke loose. In the span of one week, the price skyrocketed from $20 to $40.
You'd think that people would begin to sell at this point, and some did, but something unusual was happening: a once-in-a-decade short squeeze.
When you short a stock at $10 hoping it will go down to $5, and it goes up to $20 instead, you've suffered a 100% loss -- all of your money. However, if it then goes to $30, you've not only lose all your money, but now you owe money equivalent to your initial investment -- a 200% loss.
Since close to $1 billion of shorts flooded in to GME when it was still under $20, and it shot up to $40, giant institutions found themselves owing hundreds of millions of dollars and losing more every day. Even worse, because you have to borrow stocks to short, you have to pay interest, which made the situation even more untenable.
This resulted in a short squeeze of epic proportions: institutions began to bail out of their short positions to stop the bleeding, which meant buying stocks to cover their positions, which drove the price up further, which caused more institutions to bail out.
Today, on January 22nd, 2021, I believe the bulk of the squeeze officially began. The price opened at $43 at 9:30am and has reached $64 by 12:30pm and is still rising. WallStreetBets is predicting it'll reach $100 and some are even predicting $400. I personally entered when it was $49 per share and made $20,000 in profits in 5 minutes, other WSB people with bigger accounts are posting 6-figure profits. It's turned into a feeding frenzy, Robin Hood crossed with the Big Short (but inverted), retards robbing big banks of hundreds of millions.
There's news that short sellers are currently crying to the SEC accusing WSB of market manipulation (as if market makers and short sellers don't manipulate the market constantly)
Anyways, sorry for the wall of text, it's hard to concisely explain what has happened. Also I don't claim anything above is 100% accurate, it's just what I've managed to learn. The GME short squeeze is already worthy of an internet historian video and it isn't even half done yet.
EDIT: in the half an hour it took me to write this post the price went from $64 to $72 lmao. Short sellers BTFO
