So Let Me Get This Straight...

Some hedge fund were so confident that GameStop were going under, they short sold 140% of the available shares in the company, thinking they’d never have to fill them if GME went under.

Then some people worked out that all they had to do was own some of the 100% of the actual, existing shares, because at some point, the hedge fund would have to buy them, and simply by not selling, they would drive the price up.

And then the price went up. A lot. And suddenly, the hedge fund find out that they can’t afford to buy back all of the shares they had already sold. So some friends* lend them 2.75 billion dollars so they can buy shares at the new, inflated price. Which drove the price up further, and encouraged more and more people to try to buy in.

And then, one of the companies that lent the money to their friends stopped people from doing anything other than selling. Which stopped the price continuing to climb. But their friends were still allowed to buy. That they’d lent the money to.

Guaranteeing their friends could pay back their loan*.

• Anne found herself in VERY deep
• Bob lent money to Anne to close her short position
• Bob stopped Chris from allowing his friends to buy stock, putting the brakes on growth
• There’s some evidence Chris started making margin calls, forcing his friends to sell at the market rate whether they wanted to or not
• Presumably, Anne took advantage of this forced liquidation at (relatively) lower prices to close her position.

*Note: probably not friends. I very much doubt they’re doing this out of kindness.

2 750 000 000