I'll open a thread to try and explain what's happening with #GameStop Stock and #Reddit as I understand it.

Basically a bucnh of investors are trying to 'short' GameStop Stock (GME).

Shorting a Stock means you borrow a stock from someone that you predict will fall in price.

By doing this, you can sell the stock at its current price (say 50 USD for example) and when the price drops, you can rebuy it (for 30 USD for example) so you can return it to its owner, but you pocket the difference as profit.

The problem with this is: What if instead of the Stock going down, it goes up?

People that tried to short the stock will eventually have to return it, so they will have to buy it at its current price, if the stock goes to 80 USD instead of 30, they will lose 30 USD

When you buy stock, you can only lose the amount you invested in that stock, but when you short stocks, your loses are potentially infinite since there is no limit to how high its price can get.

At the same time, people shorting stock have a maximum profit equal to the price of the stock since its price can't fall below 0.

People in reddit noticed that some people were trying to short GME, so they banded together to buy a bunch of GME stock.

When stock demand rises, its price rises (Offer and demand law) so reddit effectively made GME price rise, foiling 'shorters' plans.

The issue with this is that this rise in price is artificial as there is no way GameStop can return that investment currently.

Eventually these people will stop buying GME and it will crash its price, causing a lot of losses among those that bought GME when its price was higher.

So basically this becomes a race between shorters having to rebuy the stock they were trying to short, and the artificial bubble created by reddit bursting.

Adding to this, some of the people that wanted to short GME are now buying the stock back to cut their loses in case the stock keeps going up. This in turn creates more demand and drives the price even higher. This is called a 'Short Squeeze'

As a whole, Reddit people that created the bubble will lose a lot of money when it bursts, but individually they won't probably lose much and some individuals may even make profit from this. On the other side, hedge funds that wanted to short the stock will lose. BIG loses.

And you may ask, why is Reddit doing this?
Shorting a stock is basically profiting from companies failing, which is seen as predatory by many. By doing this, Reddit is effectively punishing those who wanted to profit from GME failing.