GameStop short squeeze

The GameStop short squeeze occurred when many investors who bet that GameStop’s stock would fall (short sellers) were forced to buy shares to cover their positions as its price sharply increased. Retail investors, organized on platforms like Reddit, bought shares and options, driving up the price rapidly. This surge caused short sellers to incur significant losses and buy back shares at higher prices, further fueling the rise. The event highlighted how collective action can disrupt markets, leading to a rapid, massive increase in GameStop’s stock price, and exposing risks in short selling and market dynamics.