Let's be very crystal clear here: Members of the public banding together to "short squeeze" overextended hedge funds, deliberately, is perfectly *legal* activity.
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But, all of the sudden, Wall Street mavens are having conceptual problems with it. Because they aren't in control.

So what is a "short squeeze" ?
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Hedge funds often deal in something called "options." These aren't actual stocks, but contracts to buy or sell stocks at some future time. These contracts themselves have "market value" and are a major source of income for many funds. (cont).

Every *actual* stock out there has an 'owned' component - that is, the company stock is owned by something or someone, and a "float" component - a quantity of stock which can be more or less immediately sold or bought. (cont).

The option traders sometimes engage in option contracts (either puts or or calls) which represent more, sometimes far more, share than the quantity of the float. When a fund does this they have bet that no one will notice or be able to exploit this. (cont).

Now, to "squeeze" this position, what someone, or say a band of robin hoods can do, is start buying up the float until there's nothing left of it. This leaves those holding short options stuck over a barrel: They have to have the stock available to sell, but there's none at hand.

So these short holders have to go out into the market and start bidding up the price until the people with stock to sell are willing to part with it. If the short holders can't "cover" (have enough stock to cover all their option commitment), then it's bankruptcy for them. (cont)

So this is how the squeeze works: 1) identify which hedge funds have more committment on option contracts than the available float; 2) groups of people get together and start buying up the float (this raises the price of the stock a bit). (cont).

3) At some point, when the float gets lower and lower, the fund realizes that it's up the creek without a paddle unless they start buying even more of the float. So they do, if they can. They'll even borrow money to be able to buy shares to cover. (cont).

This activity by the fund (sometimes there are several funds caught out) really sharpens the price moves, making it even more difficult to cover the future option contracts. They have been "squeezed." They've lost all the money they thought to gain by their options, and (cont)

had to sink real money into buying up coverage.
4) Because the price rise had nothing to do with "fundamentals" (the actual business of the company), the high priced shares *are not* going to turn a capital gain for the fund, they will drop as soon as the (cont)

group which initiated the whole process decides to bail out. They sell out, leaving the hedge fund holding the bag, and perhaps a sheaf of bankruptcy court filings.
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This ends my Ted Talk.