| The thing that moved the share price up was simple supply and demand. From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares. But remember these are short sellers are selling something they don't yet own. They are selling a promise to sell shares at some time in the future for given price. When that future date turns up the they are forced into the market to buy shares at what ever price just so they can full fill their original promise to sell shares. They have no choice in this as it was the contract they signed. Now because shareholders weren't prepared to sell, that created massive buying pressure which then drove up the price. I suspect where reddit played it's part is they spread the word that the shore sellers had taken up such a massive short position, adding to the buy pressure and effectively killing off any sell pressure, which then makes that short sell position even worse.. |
When someone shorts a stock, it creates a new long position as well. The term is "short sell" because the borrowed shares are sold to someone else. The new buyer is also long.
Long interest is always greater than short interest for this reason. This is why short interest can be greater than 100%.
The facts didn't really matter in this pump, though. The running joke on Reddit was that no one was reading the "DD" anyway, just hopping on the bandwagon.