Now the stock is at $114. Up 75% today. Bahhaa

This is insane! I came straight to the forum as soon as I saw this. How can the stock market be so vulnerable? How many people have to be working together to make a stock do something like this? This is extreme gambling for me. This stock right now seems like it could either go to $1000 or to $1 in a matter of hours.

Well, it is the stock market after all. It tends to grow and shrink more thanks to rumours and spurs of the moment than actual, professional business insight and experience. No wonder so many crisis started in it.

It's a short squeeze.

It works basically like this:

An investor shorts a stock, meaning he bets the value of the shares of a company will drop. To do so, he sells shares, but only buys them at a later date and pockets the difference if the price went down.

However, what can happen is that the price went up instead of down. In that case, the investor might be forced to buy the stocks at a higher price, making some losses in turn.

Now imagine a company like Gamestop, which had been sliding in stock value for 6 years straight. As a result, there are tons of investors here who short Gamestop stocks. The problem is that when somebody buys Gamestop stock, their price goes up. In other words, every investor who shorted the stock and now wanted to get out of that position is driving the price higher for all the other investors in that position. As a result, they are now trying all together to get out of their shorting position, resulting in the exploding price increase of the shares.

Now you might wonder why they couldn't just wait until the price goes down again. Well, the problem with a short position is that they are generally timed, meaning you need to give the share you're selling if you're shorting within a given timeframe. This is why the investors can't just sit out the storm and wait until it goes down again and try to buy before it gets even more expensive.

And yes, shorting is nothing else but gambling at an absurd level. Investing in the stock market is gambling either way, but shorting is pretty much the worst offender in that domain.

From the article I posted:

"The effect of all of this is that some Redditors have just gotten very rich on a chaotic gamble that has, for the short term, worked out. The Redditor DeepFuckingValue, who continued to buy GameStop stock as his long-term bet paid off, has dumped more than $700,000 into the stock; according to screenshots they have posted, their stock in GameStop is now worth more than $7 million."

That's just one guy.  I am sure there are others.  They are taking huge gambles to make the stock move like it is.

Thank you @Bofferbrauer2 as always for your valuable insight. It took me a couple of reads but I think I understand the basics.

Basically in stock market, if more people want to buy than people that want to sell, then the stock goes up. But if more people want to sell than people that want to buy, the stock goes down. (is this correct?)

Therefore in this scenario, a lot of people shorted the stock, meaning they perhaps started at $20 in October, wishing the stock would go down after the holidays. But with the stock rising daily and being at $85, they probably got scared because they were already losing $65 for each share they shorted, so they are forced to buy, meaning everyone that shorted is now trying to buy the stock. Leading to the stock quickly rising because there are a lot of buyers and a few sellers.

Now, obviously the value of the stock will rise so much that people that now own the stock know it is over valued and will try to sell the stock again, meaning the stock should just drop back down quickly. So if people who shorted the stock just wait, wouldn't they be able to buy later at a more reasonable price?

I think in the end, a lot of inexperienced people are going to get burned hard from trying to play with the stock market. Imagine someone who shorted 1,000 shares at $20 and then had to buy at $150. That person basically just payed $130,000 just to get rid of the stock. 

It is horrible to see something like this. here is a screenshot of what it looks like right now:

Thank you @theRepublic for sharing that info, I had not seen the article, and it just makes things worse. How one person can really affect a market is amazing.

The spike was actually 159$ today.

Probably. Hard to update my post in real time. It went nuts for 15-20 mins. Some big green candles. 

Whole market was going nuts. Then it cooled down. 

Edit:

GameStop short-sellers lost $1.6 billion in a single day as Reddit traders rebelled against them

https://markets.businessinsider.com/news/stocks/gamestop-stock-short-seller-squeeze-losses-reddit-traders-citron-gme-2021-1-1030000080?utm_source=reddit.com

If this french analyst is right, then it is wonderful and funny. According to him, it was a trap successfully done by a group of amateurs who made a coordinated operation to force more experienced investment groups to buy back at lost their positions*

*I don't know how you call this in English, when you sell in advance a stock you do not have, and you expect to buy it later at lower price to earn the difference.

I have never yet tried that, it scares me to play with stocks "from the future".

So some smarts amateur investors planned to make it explode by offering at the open some buy orders at 4 times the prices sometimes, they really triggered a move which forced many investors to buy back their position to desperately limit their lost.

https://www.youtube.com/watch?v=1vjYwBzWJWw

Stock Options - https://bit.ly/2YfEBrk