Reddit Traders Disrupt Wall St., Push GameStop & Other Shorted Stocks

A battle is brewing in the stock market, as retail investors try to crush Wall Street shorts.

Shares of Bed, Bath & Beyond jumped 40 percent to start the week, while shares of AMC Theaters soared 70 percent. Both companies join GameStop in their meteoric rise, which more than quadrupled in value.

Here’s what happened. Professional investors have been betting against these companies. They “shorted” the stock, which means they borrowed shares and sold them — with hopes of buying them back at a cheaper price, and then pocketing the difference.

But an army of retail investors, inspired by Reddit threads, started buying up shares, forcing the price up. And that meant those short sellers, who bet on the price to fall, had to cut their losses and buy shares at a higher price — pushing the stocks up even more.

So, the retail investment community has shown it can have a significant impact on the market, and those professional investors may need to read a little more Reddit.