[231] Late night host Jimmy Kimmel criticized Stewart for his tweet, sarcastically asking him "RealDonaldTrump? The GameStop short squeeze has now lasted far longer than we might expect. 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. [263] Jaime Rogozinski, who founded r/wallstreetbets in 2012, sold off his life experience to RatPac Entertainment,[264] and a documentary based on the event, created by the studios XTR and The Optimist and partially funded by a Kickstarter campaign, is also in the works. [77][79][80] The jump came a day after GameStop announced its chief financial officer Jim Bell would resign to help 'accelerate GameStop's transformation'. "[260], In February 2021, Deadline Hollywood reported on Netflix's plans to develop a movie based on the events, with Mark Boal in negotiations to write and Noah Centineo set to star in the film. https://www.reddit.com/r/wallstreetbets/, After GameStop's stock closed up 92.7 percent on January 26, business magnate Elon Musk tweeted "Gamestonk!! [184][185] Several other investors began using the app DoNotPay to automatically join the lawsuit. The GameStop short squeeze, starting in January 2021, was a short squeeze occurring on shares of GameStop, primarily triggered by the Reddit forum WallStreetBets. [228], Several celebrities and influencers also criticized Robinhood. [96] The surge also had an effect on the prices of gold and copper on the London Metal Exchange. [73][74][75], On February 24, GameStop share prices doubled in heavy volume in the final 90 minutes of trading, with the company's stock halting twice, shortly before closing at $91.70, a 104-percent gain. [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. [57] Clearing houses must have enough collateral on hand to settle a member's outstanding transactions in the event any particular member firm failsto prevent cascading failures of other membersand can demand additional collateral (i.e., margin calls) from members if market volatility starts to increase. [47], According to The New York Times, the short squeeze has called into question the viability of short selling as an investment strategy. [85], On March 25, the stock rose 53 percent from its previous day's decline of 34 percent. At various points during his initial testimony and questioning, Gill made references to memes. [47], According to the Financial Times, a "gamma squeeze" also took place in addition to the short squeeze: as traders bet on the rise of stocks by purchasing call options, options sellers hedge their positions by purchasing the underlying stocks (here, GameStop and the related securities), thereby driving their prices even higher. MeaningCloud is a Software as a Service product that enables users to embed text analytics and semantic processing in any application or system. "[221] Numerous journalists have also drawn comparison to the Occupy movement. Dozens of class action lawsuits have been filed against Robinhood in U.S. courts, and the U.S. House Committee on Financial Services held a congressional hearing on the incident. [60][58][61] Clearing houses include the Depository Trust & Clearing Corporation (DTCC) for equities and the Options Clearing Corporation (OCC) for options. [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". Several hedge funds even . Keith Gill (u/DeepFuckingValue), r/wallstreetbets, January 2020[14], Even before the short squeeze, there had been interest in GameStop (ticker symbol: GME). The rally call was reportedly organized from r/bursabets, a Malaysian offshoot of r/wallstreetbets named after the Malaysian stock exchange. [183], A Robinhood customer filed a class-action lawsuit against the company on January 28, 2021, for halting trading on GameStop. Why? GME shares currently have a short interest ratio of 10.0. Chohan, U.W. This is in contrast with taking a long position (simply owning the stock), where the investor's loss is limited to the cost of their initial investment. [23] 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. All of those years of High Frequency Traders front running retail traders, now speed and density of information and retail trading is giving the little guy an edge. In the gamestop short squeeze, melvin and citron (and possibly others) shorted gamestop's stock. A group of angry Redditors have caused billions of dollars of damage to hedge funds shorting GameStop stocks. A Detailed Overview of the GameStop Short Squeeze February 25, 2022 A Detailed Overview of the GameStop Short Squeeze From January 4, 2021 to January 29, 2021, the GameStop Corp. (GME) stock rose from $17.25 to $325.00, which is almost a 1900% increase in valuation (Yahoo Finance, 2021). In which case my initial reaction is that it's awesome Reddit users and others are sticking it to 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. Move Over, GameStop", "After GameStop-like surge, Rocket stock frenzy shows signs of subsiding", "GameStop frenzy takes cryptocurrency market over $1 trillion", "Reddit frenzy pumps up Dogecoin, a cryptocurrency started as a joke, by over 800%", "The GameStop stonk bubble has swallowed DogeCoin, Frankie Muniz", "Bitcoin spikes 20% after Elon Musk adds #bitcoin to his Twitter bio", "Robinhood restricts crypto trading as Dogecoin soars 300 percent", "Silver futures jump 7% as Reddit traders try their squeeze play with the metal", "Silver Is the Latest Market Hit by Reddit Day-Trader Frenzy", "Silver hits eight-year high, but who's behind the buying? In premarket trading, the price reached levels above $500, from around $17. [114][115] An analysis by Reuters concluded that some of Wall Street's largest asset managers were able to realize gains both from their share stakes, as well as from lending out stocks to short sellers. [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. [24][101] In an interview, he claimed that the company had covered the majority of its short positions in the range of $90 per share at a loss of 100 percent, retaining a small, manageable position. The short squeeze was initially and primarily triggered by users of the subreddit r/wallstreetbets, an Internet forum on the social news website Reddit, although a number of hedge funds also participated. At its height, on January 28, the short squeeze caused the retailer's stock price to reach a pre-market value of over US$500 per share ($125 split-adjusted), nearly 30 times the $17.25 valuation at the beginning of the month. The price of many other heavily shorted securities and cryptocurrencies also increased. [144][145] On March 2, Rocket Mortgage saw a more than 70 percent spike in its stock price due to a surge in trading following discussion of the company on r/wallstreetbets,[146][147] but the Rocket Mortgage stock price reverted to its pre-surge level the next day. [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. GameStop was the most shorted stock on Wall Street in early January. The same judge had previously dismissed a lawsuit alleging that there was collusion between brokerages and Citadel Securities. As with a typical short squeeze, the short-covering added to the upwards price action. ", "This is beyond absurd. Large losses could lead to a short squeeze Dusaniwsky calculates that there continues to be moderate short covering in GameStop with short sellers covering 685,000 shares, worth $207. On March 25, the stock recovered dramatically, rising by 53 percent. It requires that companies outline the related risks in their financial disclosures and encourages companies to contact the SEC prior to launching such offerings. It will be ugly, and everyone will mock me as usual, but I expect GME to bounce back just as it did after the two previous earnings readouts. [192][193] In January 2022, a federal court ruled that investors could not pursue negligence and breach of fiduciary duty claims, citing Robinhood's customer agreement which allowed for restrictions on trading. In 31st ACM Web Conference, Industry Track (WWW), Lyon, France (2022). GameStop may also be known as or be related to Babbage's (1984-1999), GameStop, GameStop Corp, GameStop Corp . being halted at least once as the price fell by double-digit percentages. He Talked to the Journal", "The 'Roaring Kitty' Rally: How a Reddit User and His Friends Roiled the Markets", "Famed GameStop bull 'Roaring Kitty' is a Massachusetts financial advisor", "How WallStreetBets Redditors Used Their Collective Power to Manipulate the Stock Market", "Meme Stock War Stories: From GameStop Diamond Hands to Robinhood's Reversal", "Melvin Capital, GameStop and the road to disaster", "Reddit's r/WallStreetBets breaks all-time traffic record as hedge fund bleeds", "Reddit group WallStreetBets hits 6 million users overnight after a wild week of trading antics", "Counter-Hegemonic Finance: The Gamestop Short Squeeze", "How WallStreetBets Pushed GameStop Shares to the Moon", "The Real Force Driving the GameStop Revolution", "GameStop stock halts trading after Reddit drama", "GameStop's stock rockets again in volatile trading, while company has not released news or commented", "Teens Are Gambling Their Savings on GameStop Stock. . [103] Other firms that incurred large losses include D1 Capital Partners, which lost $4 billion (20 percent of its capital). [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. Any number over 10% is relatively high, but it's nothing crazy for a company like GameStop that is struggling so badly. [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. Short selling is a finance practice in which an investor, known as the short-seller, borrows shares and immediately sells them, hoping to buy them back later ("covering") at a lower price, return the borrowed shares (plus interest) to the lender and profit off the difference. GME Is GameStop's Short Squeeze Just Around The Corner? [55] Some users alleged that Robinhood was selling shares without consent; Robinhood denied these allegations. [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. In fact, there are multiple companies that have caught the attention of investors looking for a short squeeze. Short sellers are then forced to buy back the stock they had initially sold, in an effort to keep their losses from mounting. [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. [173], Attorney General of New York Letitia James confirmed in a press release that her office would look into the matter, saying "We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock". Market mechanisms include the reality that some people will attempt to game the market mechanisms and some will pay the price. [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. [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. GameStop And The Short Squeeze. On January 22, 2021, approximately 140 percent of GameStop's public float[a] had been sold short, meaning some shorted shares had been re-lent and shorted again. 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