You have heard about the small video game store called Game Stop, and all the attention it's been getting.
It's value has skyrocketing.
"This is a really interesting story, " said Pete Najarian Co-Founder, MarketRebellion.com and best-selling author of "Follow The Smart Money.
"I think you have to step back and look at the framework. The framework of why this is happening," he said. "There are stocks out there that have large short interest in them."
Najarian told WCCO Radio's Cory Hepola that there are people who bet on a stock to go lower rather than higher. They are called hedge fund managers. In the case of Game Stop he said;
"On January 12th, this was a 20 dollar stock," he said. "On the 13th it started to explode and within days it was trading 65 dollars a stock."
We will get to the reason for the sharp increase in a minute. But first, the mechanics.
The issue is that the hedge fund managers have to borrow a stock to be able to short it, and the sudden increase in Game Stop basically put the squeeze on them, because as the stock price went up, the hedge fund managers ended up having to pay more to short it.
"There are 100 million shares out there of Game Stop, but there are 230 million are sold short. That's ridiculous." Najarian said.
It's one thing when those percentages are in the lower numbers which happen a lot.
"There are people who bet against stocks, like Tesla, Game Stop, Blackberry, and AMC. But the Game Stop short-selling fiasco is different. It's not just a 20 or 30 percent short, they have shorted double the quote of the stock, and that's something I don't ever recall having seen before."
So let's go back to what happened exactly? Enter Reddit, a network of communities based on people's interests. Followers put the word out to buy up the stock, increasing the value as kind of a jab at Wall Street.
"I think there is some resentment from those on Main Street toward Wall Street, as people see all the money that's being made," Najarian said.
He suspects there will some investigation into how the Game Stop situation got so crazy.
And, now the brokerage houses have now restricted any new trades going in, which is making those who started the short-selling of Game Stop even madder.
"They are doing nothing different than a hedge fund manager if they could do the trade."
He says hedge fund managers go out to dinner to talk about what stocks to short, so this is no different.