Here's kinda the full story and backdrop. I wrote this like a week ago so it's a little outdated.
Take it back to March 2020. Gamestop is a dying company. Everything Gamestop did in the past can now be done online. Worse, Covid-19 is decimating physical retail. People expect Gamestop to file for bankruptcy anytime. Share price: ~$2.80.
Enter wallstreetbets, the autistic capital of the online investing world. Several users begin to go bullish on GME. They're laughed at and called retarded. Most notably, a user, /u/DeepFuckingValue, who has been invested in GME for a very, very long time, reiterates his position in the stock while providing monthly updates. In January 2020 he is down thousands of dollars (-40k). However, by the end of April 2020, he's finally green (+41k). And he's just getting started. Share price EoM April: ~$5.75.
While all this is happening, hedge funds/investors have been shorting Gamestop. I won't go into the exact mechanics of shorting a stock, but what's important to know is that unlike buying a stock and making money when it goes up, in short (aka selling short and short selling) you make money when the stock goes down. Short selling is important to the story. The funds who sell short are called short sellers. The biggest short seller is Melvin Capital. Short sellers made a lot of money shorting Gamestop from $45 to $2.
IIRC, things are quiet from April end to June. GameStop stock keeps seesawin between $3 and $6.
It's near the end of August now. GameStop has made some good moves in regards to paying of their debts and taking better loans. They might have done other stuff too, I don't fucking remember. Console release hype for the new Xbox and PS are setting in.
Out of the blue, Microsoft announces a fantastic partnership with GameStop.......