[113][111], While the short squeeze was initially reported as being driven by retail investors, it later emerged that a substantial part of the market activity surrounding GameStop and the related securities was conducted by hedge funds, who had made substantial profits from the short squeeze. It's difficult to have a partnership when these kind of things go down this way. [49] Other brokerages soon followed suit. Earlier that day the share price had soared to nearly $350 (250) - 100 times more than this time . Several Wall Street analysts released research . Optimize for integrity whenever possible because integrity compounds and assholes will fuck you. [117] Brokerages, trading systems and market makers have also gained from higher-than-average volume of transfers. [119] Mudrick Capital Management made a profit of close to $200 million in January 2021 on its holdings of AMC debt, and a profit of $50 million writing call options on AMC and GameStop stock. Here's how they end", "Reddit's WallStreetBets Founder Sells Life Story to Movie Producer RatPac Entertainment", "GameStop and WallStreetBets Documentary in the Works From XTR and The Optimist", "Gaming Wall Street Trailer Examines Gamestop's 2021 Stock Phenomenon", "Review: Talking-head documentary 'Gamestop: Rise of the Players' focuses on the little guys", https://en.wikipedia.org/w/index.php?title=GameStop_short_squeeze&oldid=1150240747. So, as long as management can provide some results, then we should be good. Citadel Securities stated that they did not instruct any brokerage to suspend or otherwise limit trading, and Robinhood denied that it had been pressured by Citadel. [261] Separately, Metro-Goldwyn-Mayer (MGM) acquired the rights to make its own movie based on Ben Mezrich's book proposal The Antisocial Network, aimed at chronicling the recent events on Wall Street. It requires that companies outline the related risks in their financial disclosures and encourages companies to contact the SEC prior to launching such offerings. [22], Suggested factors included anger of some investors towards Wall Street hedge funds for their role in the financial crisis of 2007 and 2008,[23][18][24] or the general democratization of the stock market coupled with the ability of retail traders to communicate instantaneously through social media. [116], Hedge fund manager Senvest Management, which had previously bought a five percent stake in GameStop when shares were at $10, made a profit of $700 million, exiting its position after Elon Musk tweeted "Gamestonks!". [106] According to Morgan Stanley, a number of hedge funds covered their short positions and sold shares in their portfolio to reduce leverage and market exposure, in some of the largest such actions within 10 years. being halted at least once as the price fell by double-digit percentages. [122], Many retail investors and r/wallstreetbets users bought shares of GameStop and other affected securities as they were reaching their peak prices or shortly afterwards. [96] The surge also had an effect on the prices of gold and copper on the London Metal Exchange. In addition, the many call options they bought forced the brokers to buy GameStop shares as well. Purchasing the stock to cover their short positions raises the price of the shorted stock, thus triggering more short sellers to cover their positions by buying the stock. This was speculated to have been due to a joke or mistake, as the ASX symbol was the same as GameStop's NYSE ticker symbol (GME). The practice carries an unlimited risk of losses, because there is no inherent limit to how high a stock's price can rise. GameStop's rocket ship has come back to earth. [78], On March 8, the stock saw continued rising of 41 percent to $194.50, and with around 25 percent of the stocks being shorted at this time. Keith Gill (u/DeepFuckingValue), r/wallstreetbets, January 2020[14], Even before the short squeeze, there had been interest in GameStop (ticker symbol: GME). [94] On January 27, a Melvin Capital spokesperson stated that the fund had closed its position after repositioning its portfolio. The Congressional Research Service ("CRS") provided a timeline for the run-up to the GameStop stock "short squeeze." In its Insight report, the CRS highlighted the speculated motivations for investor support of GameStop - such as the belief that the stock was undervalued and "getting back" at Wall Street for the 2008 stock market crash - as well as the relationship between volatile stocks and . [155], Following the stock market surge, futures for silver began to rapidly increase as well,[156][157] although later news reports clarified that it was unclear who was behind the rise. This decision attracted criticism and accusations of market manipulation from prominent politicians and businesspeople from across the political spectrum. Chohan, U.W. GameStop dropped 44% on Thursday, falling for the first time in six days as Robinhood and Interactive Brokers limited trading in several of the heavily shorted names to closing positions only,. Find the latest GameStop Corp. (GME) stock quote, history, news and other vital information to help you with your stock trading and investing. These shares were worth $44 million on December 31, but reached $1.1 billion when GameStop's stock reached $469, briefly making him a billionaire, before the value of his stock dropped to $901 million on January 29. "[108] Trading on March 8, specifically, caused $609 million in losses from short sellers. [266] The documentary GameStop: Rise of the Players interviewed several of the r/wallstreetbets users and was released on January 28, 2022. [99][100], According to a report by Bloomberg, Andrew Left, an activist short seller and head of Citron Research, had also shorted the stock and claimed to have closed the position as a total loss. The price of many other heavily shorted securities and cryptocurrencies also increased. The shares of GME Resources, an Australian mining company with Australian Securities Exchange (ASX) symbol GME, increased more than 50 percent during intraday trading, closing with a 13.3-percent increase on January 28. In a short squeeze, if users are able to drive the price of a stock high enough, they can force hedge funds to liquidate their short position, driving the price even higher. (2023). MeaningCloud is a Software as a Service product that enables users to embed text analytics and semantic processing in any application or system. The typical short squeeze lasts one or perhaps two days, with the major price spikes often happening overnight.. [222][223][224] Similar sentiments sympathetic for the retail investors were expressed by billionaire investors Mark Cuban[225] and Chamath Palihapitiya. "[218] In another CNBC interview joined by Canadian businessman and Shark Tank investor Kevin O'Leary, O'Leary disputed Galvin's assertions, saying that real-world education was positive; that the risk of being targeted by "social media vigilantes" would dissuade hedge funds from aggressively selling short stocks; and zero-commission brokerage apps such as Robinhood had sparked a growing interest in retail investing. . They're blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who've used the stock market as a casino for decades", "Why Wall Street Is 'Losing Its Mind' Right Now", "Rush Limbaugh: GameStop saga mirrors politics as elites attempt to prevent regular people from benefiting", "Note: Robinhood absolutely should not be stopping trading of GameStop. [195], On February 8, 2021, the U.S. Securities and Exchange Commission released a sample letter providing guidance to companies seeking to raise capital during periods of "extreme price volatility". The suit alleges Gill misrepresented himself as an amateur investor to inflate the stock price. At various points during his initial testimony and questioning, Gill made references to memes. [12][28] According to Dow Jones market data, more than 175 million shares of GameStop were traded on January 25, the second largest total in a single day, surpassing its 30-day average volume of 29.8 million shares. The GameStop short squeeze story is headed to the big screen in 2023. As with a typical short squeeze, the short-covering added to the upwards price action. The proportion of shares borrowed to back those short positions had been between 50 and 100 per cent of the company's. Among the skeptics is Andrew Left, a prominent short seller who issued a negative analysis of GameStop via YouTube on Jan. 21 and has been so pummeled by abusive online investors since that he . As a member of the Financial Services Cmte, I'd support a hearing if necessary. [27] The stock price increased 1,500 percent by January 27 over the course of two weeks, and its high volatility caused trading to be halted multiple times. I've dealt in deep value stocks for years but have never endured bearish sentiment this heavy. The GameStop short squeeze, starting in January 2021, was a short squeeze occurring on shares of GameStop, primarily triggered by the Reddit forum WallStreetBets. Shares closed at $246.90, and increased a further 3 percent in after-hours trading. [56], Several brokerage firms, including Robinhood, stated on January 29 that the restrictions were the result of clearing houses raising the required collateral for executing trades. GameStop And The Short Squeeze. GameStop had been a favourite target of short-sellers for some time. [251] The Washington Post reported that Robinhood routed more than half of its customer orders to Citadel, which was its largest market making partner by volume. Canada - English. In premarket trading, the price reached levels above $500, from around $17. GameStop short squeeze round 2 while the banks and hedge funds go bankrupt sounds about right. [111] There is no allegation of insider trading among BlackBerry executives, according to CBS News. [174][175], Texas Attorney General Ken Paxton said he would also investigate the decision of brokerages to limit the buying of securities related to GameStop and other stocks, saying that it "stinks of corruption". [153] In addition, the price of Bitcoin, the world's largest cryptocurrency, increased 20 percent in value to more than $37,000 after Elon Musk endorsed it in his Twitter bio, partially related to the surge in the GameStop share price by Reddit users. [181], On March 17, 2021, the Financial Services Committee held a second hearing, which focused on the regulation of payment for order flow[182] and gamification of investing. [239], Disgruntled users review-bombed the Robinhood app on the Google Play Store after it halted the trading of GameStop securities, pushing its ratings down to one star. [51] Trading platforms such as UK-based Trading212 and Israel-based eToro blocked buys of GameStop and other stock while continuing to allow sales. They also questioned whether Robinhood was encouraging its customers to take excessive risks in order to generate a profit and whether it had the appropriate infrastructure and funding to handle influxes of new clients. On February 24, the GameStop stock price doubled within a 90-minute period, and then averaged in the neighborhood of $200 per share for another month. In 31st ACM Web Conference, Industry Track (WWW), Lyon, France (2022). [245][246][247] Several financial executives hired additional security due to online threats. [215] She also called for stronger regulatory action from the U.S. Securities and Exchange Commission "to ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders. [249] Citadel Securities is the sister company to Citadel LLC, which along with Point72 Asset Management invested $2.75 billion into Melvin Capital. [98], On June 22, 2021, White Square Capital, a London-based hedge fund that was reported to have suffered "double-digit" losses betting against GameStop, announced that it would be shutting down. [219], On January 28, New York State Comptroller Thomas DiNapoli told reporters that the state pension fund, which had 647,500 shares in March 2020, had sold off hundreds of thousands of shares since then, benefiting from the squeeze. [148][149], After brokerages halted the buying of GameStop and other securities, the price of several cryptocurrencies also began to increase substantially, with Dogecoin's value increasing over 800 percent. [154] Robinhood then began limiting the trading on Dogecoin. On March 25, the stock recovered dramatically, rising by 53 percent. Is that you? [40], On January 27, r/wallstreetbets triggered a short squeeze on AMC Theatres (ticker symbol: AMC), a company in a similar position to GameStop. [32], Gamestonk!! Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide. [248], Following the decision by brokerage firm Robinhood to halt the buying of stocks affected by the short squeeze, users on Reddit and other social media called in question its relationship with Citadel Securities. [252][253] As Robinhood restricted trading of GameStop shares, users alleged that Citadel Securities directed Robinhood to do so. In fact, there are multiple companies that have caught the attention of investors looking for a short squeeze. [111] Three BlackBerry executives sold nearly $1.7 million of the company's stock, with one of the executives, Chief Financial Officer Steve Rai, selling all of his shares in the company excepting unvested employee stock options. Gabe Plotkin of Melvin Capital hired security after facing anti-semitic slurs and threats. [20][89][90] Citadel LLC and firm partners then invested $2 billion into Melvin, while Point72 Asset Management's investment added $750 million, for a total investment of $2.75 billion,[91][92][93] before Melvin told CNBC that they covered (closed) their position on January 26, although the exact amount was not disclosed. Main article: GameStop short squeeze On January 22, 2021, users of r/wallstreetbets initiated a short squeeze on GameStop, pushing their stock prices up significantly. [67], On February 1 and 2, the stock price for GameStop declined substantially, losing more than 80 percent of its value from its intraday peak price, recorded during the previous week. [170], On January 29, 2021, the U.S. Securities and Exchange Commission announced it was reviewing the incident with the aims "to protect retail investors"[171] from "abusive or manipulative trading activity"[172] and "to identify and pursue potential wrongdoing". "[234] Barstool Sports founder David Portnoy also criticized Robinhood for its lack of "free trading". "[b]a reference to the "stonks" meme rising in popularity at the timealong with a link to the r/wallstreetbets subreddit. This initially triggered a monstrous short squeeze. [120] The Church of Jesus Christ of Latter-day Saints, through its investment manager Ensign Peak Advisors, bought 46,000 shares of GameStop in 2020, and saw the value of its investment jump 900 percent. On January 28, some brokerages, particularly app-based brokerage services such as Robinhood, halted the buying of GameStop and other securities, citing the next day their inability to post sufficient collateral at clearing houses to execute their clients' orders. [220], In a CNBC interview, Reddit co-founder Alexis Ohanian compared the rally to Occupy Wall Street, saying that "it's a chance for Joe and Jane Americathe retail buyers of stockto flex back and push back on these hedge funds. [50] After the markets closed, Robinhood announced it would begin to allow "limited buys" of the affected securities starting the following day, although it was unclear what "limited buys" entailed. A team of researchers has extensively analyzed discussions on /r/wallstreetbets from November 27, 2020 through February 3, 2021, finding that it took only a few dedicated individuals to trigger a behavioral cascade that resulted in an unprecedented short squeeze of GameStop's stock, driving the price up roughly 2,000% during that period.. The same judge had previously dismissed a lawsuit alleging that there was collusion between brokerages and Citadel Securities. [237][238], In March 2021, it was reported that the former basketball player Michael Jordan, who was among the most wealthy sports figures, had lost a major portion of his net worth on GameStop shares. [63] On January 30, Robinhood announced it had increased the restrictions from the sale of 13 securities to 50, including companies such as Rolls-Royce Holdings and Starbucks Corporation. Any number over 10% is relatively high, but it's nothing crazy for a company like GameStop that is struggling so badly. Last week it was trading at about $40 a share. I expect the narrative to shift in the second half of the year when investors start looking for ways to play the console refresh and they begin to see what I see. The movie will feature the David vs. Goliath battle between retail traders and hedge funds and use actors instead of a . [13] Observers congregating around r/wallstreetbets believed the company was being significantly undervalued, and with such a large amount of the shares being short they could trigger a short squeeze, by driving up the price to the point where short sellers had to capitulate and cover their positions at large losses. [179][180] Committee members also discussed increasing short-selling regulation. Feb 18 (Reuters) - Top executives from hedge funds and the Robinhood trading platform will appear before a U.S. House panel on Thursday to explain how a flood of retail trading drove shares of. Short squeeze is a term used by market participants to refer to a phenomenon where short sellers in a stock who have placed their bets on a stock's fall, rush to hedge their positions or buy the stock in the event of an adverse price movement, in order to cover their losses. [36] As of January28, 2021[update], the all-time highest intraday stock price for GameStop was $483.00 (nearly 190 times the low of $2.57 reached 9 months earlier in April 2020). [81] On the morning of 10 March, the stock rose as high as $348.50, before being paused for volatility, and then dropping 40 percent by 12:30 pm EST to the previous day's close. Why? Hello! [240] Google deleted at least 100,000 such reviews, calling them "coordinated or inorganic". [21] r/wallstreetbets was the fastest-growing subreddit at the time the community surged by more than 1.5 million users overnight (to a total of 6 million members) on January 29. Yea there's deep value, then there's deep fucking value. [233] YouTuber Philip DeFranco announced he would be dropping his partnership with Robinhood, saying "Robinhood is never getting a fucking spot on my show again regardless of the offer. [76] Reports could not identify a specific cause for the surge. Tesla's . Meanwhile, apes remain confident that the stock can go. 8 min read . In an "ask me anything session" on r/wallstreetbets, entrepreneur Mark Cuban also encouraged GameStop buyers to hold on to their stock if they were able to. [69][70] Other assets affected by the short squeeze and put under company trading restrictions, such as AMC and Blackberry shares, also declined in value. Then if we look at the third most recent 13F Form, which came out on March 31st, 2020 we can see they claim to be shorting 2,800,000 shares of Gamestop at $9,800,000 of Value, which means they shorted GME for $3.50 a share. We now need to know more about @RobinhoodApp's decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. [9][10] In August 2020, Ryan Cohen (the former CEO of online pet food retailer Chewy) revealed a 9-percent investment in GameStop, leading some to believe that the stock was undervalued. Approximately 140 percent of GameStop's public float had been sold short, and the rush to buy shares to cover those positions as the price rose caused it to rise even further. In January 2021, a short squeeze of the stock of the American video game retailer GameStop and other securities took place, causing major financial consequences for certain hedge funds and large losses for short sellers. Can rise processing in any application or system is headed to the big screen in 2023 any. 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