Thread by @businessinsider

Video-game retailer @GameStop has had a chaotic week.

Its stock value was below $5 per share in mid-August, but share prices have recently skyrocketed – mainly thanks to @reddit.

Here’s what’s going on. businessinsider.com/explainer-what…

In the second half of 2020, big financial names like Michael Burry and Ryan Cohen began buying up shares in GameStop, increasing its share value until it surpassed its pre-collapse value in late 2020. businessinsider.com/explainer-what…

That's right around when Reddit picked up the scent.

WallStreetBets subreddit members rushed into the stock on January 13, praising the move and calling on each other to squeeze short-sellers out of their bearish positions.

GameStop closed 57% higher. markets.businessinsider.com/news/stocks/re…

On the morning of January 22, the day-traders of WallStreetBets won out. GameStop shot higher on a wave of unprecedented volatility.

The climb was so rapid that, at roughly 12:40 p.m. ET, the @NYSE halted trading.

markets.businessinsider.com/news/stocks/ga…

But why @GameStop? And why now? These are the main reasons Redditors sent the retailer "to the moon." businessinsider.com/why-gamestop-s…

The main theme for WallStreetBets' posts is collective power – enough to push back on hedge funds and analysts that predicted the stock would never reach such heights.

As more people buy the stock, like WallStreetBets encouraged, its price increases. bit.ly/3r3s9Y3

Now, GameStop shares have topped $330, and short-sellers have lost billions because of Reddit traders pushing the price up.

Melvin Capital and Citron Research were among the list of short-sellers, and they've lost their bet by a lot. markets.businessinsider.com/news/stocks/ga…

In a normal bet, which is called going long, investors purchase a stock with the hopes of it increasing.

But, to short a stock means the investor is betting the price of that company's shares will decline. businessinsider.com/how-short-sell…

Sometimes, like with GameStop, the shorts get "squeezed" when the shares go up, said Telsey analyst Joe Feldman.

The buyers of the stock send the price up forcing the shorts to close their positions and become buyers, sending the price even higher. bit.ly/3aa3HgF

The problem with shorting the stock at the higher price now, betting it will go back to normal levels, is that analysts are unsure where the irrational share increase will stop.

"What if it goes to infinity?" analyst @michaelpachter told Insider. businessinsider.com/how-short-sell…

For now, White House press secretary @jrpsaki said the Treasury and others were "monitoring the situation" with GameStop. businessinsider.com/biden-white-ho…

Meanwhile, @ewarren and @AOC slammed hedge funds who criticized the GameStop traders, saying they treat the stock market like a "casino." businessinsider.com/gamestop-warre…

The work of these Redditers doesn't mean the value will hold in the long run or that GameStop is worth its stock value to its shareholders.

@michaelpachter told Insider the explosion in GameStop's stock value is "just a cult phenomenon." businessinsider.com/explainer-what…