If i recall correctly, that happens is that they "borrow" the stock then turn around and sell it, planning to buy it back before having to return it to the person they borrowed it from. They did that so much that one rich guy calculated that there were more floating shares then actually existed and was effectively able to buy enough shares that he had nearly as many as there were real shares, then chose to sit on them. This meant that when the investors had to return their shares they found they couldn't purchase them back because they didn't exist. They tries some tricks to artificially lower the price with high speed trades at a discount but the investor also had a fast connection and was able to intercept these trades and buy them before the intended buyer. It had effectively triggered a margin call, which requires all borrowed shares to be returned to the original owner with financial penalties in place if the shares were not returned. Since there were no shares to return, that would've caused massive payouts which would require mass selling other shares to cover, which would trigger additional margin calls.
Basically on the verge of a chain reaction that would've torn the house of cards down.
