good luck to them - I understand <nothing> about all of it
Somewhat simplified explanation...
Firstly it's important to understand what "short selling" is.
Normally with shares you think that people buy low and sell high to make money - you find a share that you think is going to go up in price, you buy it and sell it later at the higher price to make a profit.
"short selling" is what you do when you think that the price of a share is going to fall. How this works is pretty simple really. What you do is you find someone who owns some of those shares and you rent them from them. You sell those shares and then at a later date you buy them back and return them to the owners, paying the rental fee as you do.
So if you rent and sell the shares at £10/share and then buy them back at £5/share you make £5 per share, minus the fees you pay to rent those shares.
If you rent shares then at some point you must give them back, which ultimately means you have to pay whatever the share price is when the owners demand those shares back. This means you can lose theoretically infinite amounts of money. Imagine renting and selling shares at £10/share and then having to buy them back at £1,000/share... plus paying the rental fees on top of that.
So short selling makes sense but things get crazy when "naked short selling" is allowed - this is illegal in the UK, but not in the US afaik. "Naked short selling" lets you sell shares you haven't borrowed and then buy them back. It makes no sense to me at all, like not at all but there is some mechanism in the stock market that makes it possible. Alongside this you can have a chain of short sellers - I rent shares from you and sell them to Ska, who rents them to someone else.
Both of these things allow a situation where there are more shares being shorted than there are shares in existence.
This is what happened with GameStop. The number of shares being shorted was at over 100% of the shares in the company.
So when the hedge funds that were shorting gamestop need to return the shares they've rented, they will need to find lots of people willing to sell, and let the short selling chains unravel or the naked short selling mechanisms work their magic. Either way you need a substantial number of share owners willing to sell to unwind the position.
GameStop has a substantial insider holding - people who took over the company last year (iirc) and own a big chunk of it, that cannot be sold without prior notice. This further reduces the available shares to buy and makes things more difficult for the short sellers.
If the owners of the shares refuse to sell, the short sellers must keep offering higher and higher prices for the shares. They have to buy them back and return them or face a "margin call" which is where the markets make them prove that they have the funds to cover their position (ie: repay the people the rented the shares from, not with shares but with cash to the value of those shares). The big hedge fund that was shorting the shares (Melvin) had to get a capital injection of $3.5bn to cover their position in the earlier spike on that graph, which they got from another hedge fund (Citadel)
So what Redditors are trying to do is buy enough of the available shares to hold onto them and refuse to sell until the prices goes "to the moon" as they say. There are also some massive hedge funds doing the same. As long as they control enough of the available shares and refuse to sell, the price will keep rising... this is known as a "short squeeze" or if it really goes far enough an "infinite short squeeze" (because in theory the share price could go to infinity).
Of course it'll reach a price where the big hedge funds sell off, and the likely hood is that they hold enough to start the reddit lot and other holders to sell off as the price starts to fall and then crashes. That price may or may not be high enough to bankrupt the hedge funds that have been short selling gamestop.
Just remember, at some point the hedge funds that are short selling must buy those shares at whatever price the market offers them at. This is what makes the short squeeze possible.
Hope that helps, please ask for clarification on anything I've said