So how did Reddit users band together to inflate GameStop's stock prices? Let's rewind to April 2020.
According to Bloomberg, Reddit user Senior_Hedgehog pointed out that 84 percent of GameStop's stock was held in short at the time of his post, which was shared on the r/WallStreetBets forum. The user then called on his fellow investors to buy as many GameStop shares as possible, and demand their brokers not to loan their new shares to short-sellers. The post is widely credited for igniting, what many have called, the "David vs. Goliath" battle between individual investors and hedge funds.
Although the efforts to screw over big Wall Street began nearly a year ago, it wasn't until this month when the support for GameStop ballooned on Reddit. More and more users began utilizing trading platforms like Robinhood to purchase GameStop shares and collectively inflate the company's stock prices.
WallStreetBets also received a major boost this week, when Tesla CEO Elon Musk promoted the forum on his Twitter.
The massive rally resulted in major losses for major investment firms like Melvin Capital, which is known for its short positions in GameStop.