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. [66] However, on January 31, Robinhood announced it had removed several of these restrictions and would only limit the sale of eight securities. [57][249][250][60] In November, a U.S. District Court dismissed a class action lawsuit ruling that investors failed to show collusion. [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". . MeaningCloud extends the concept of semantic API with a cloud-based framework that makes the integration of semantic processing into any system something close to a plug-and-play experience. This decision attracted criticism and accusations of market manipulation from prominent politicians and businesspeople from across the political spectrum. [30], Later analysis by a cyber security company of social media posts suggested that thousands of automated bots may have hyped GameStop stock, Dogecoin, and other stocks, on social media. Market mechanisms include the reality that some people will attempt to game the market mechanisms and some will pay the price. The suit alleges Gill misrepresented himself as an amateur investor to inflate the stock price. Chohan, U.W. [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. GameStop was the most shorted stock on Wall Street in early January. 8 min read . GameStop's short percent of float recently was about 13.3%. As of Jan. 28, the companies with the highest short interest are: So, as long as management can provide some results, then we should be good. [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'. 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,. [85], On March 25, the stock rose 53 percent from its previous day's decline of 34 percent. [57][249][250] Bloomberg News had previously reported that 40 percent of Robinhood's revenue was derived from selling customer orders to market-making firms including Citadel Securities and Two Sigma Securities, in a practice known as payment for order flow. [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. As with a typical short squeeze, the short-covering added to the upwards price action. As a member of the Financial Services Cmte, I'd support a hearing if necessary. ", "This is beyond absurd. In premarket trading, the price reached levels above $500, from around $17. . [179] Witnesses at the hearing included Reddit user and investor Keith Gill, Citadel CEO Ken Griffin, Reddit CEO Steve Huffman, Melvin Capital CEO Gabriel Plotkin, Cato Institute financial regulation expert Jennifer J. Schulp, and Robinhood CEO Vlad Tenev. [114] The mutual fund Morgan Stanley Institutional Inception saw a 30-percent rise in its value based in part due to the 346,943 GameStop shares it had purchased in September 2020. [64][65], As of January 29, Robinhood was still imposing limits on the trading of GameStop, AMC, and Blackberry stocks. [95][96] For the month of February, Melvin posted a 22-percent gain, but it would need much more to break even from their earlier losses; they were reported to have suffered further losses during the GME's continued resurgence in May 2021. No timelines, all speculative. [160][161][162][163], On January 27, 2021, White House press secretary Jen Psaki said that Treasury Secretary Janet Yellen and others in the Biden administration were monitoring the situation. GameStop isn't the only stock being targeted by investors. Top Glove, Hartalega and Supermax respectively recorded increases in shares as high as 15 percent, 10 percent and 9.2 percent during intraday trading on January 29, before closing with respective increases of 8.5 percent, 5.4 percent and 3.7 percent. GameStop shares lost 60 percent of their value on February 2, closing below $100 for the first time in a week. It notes that Swartwout then stated, "I have to say I am beyond disappointed in how this went down. CNN reported that the drop was partly due to restrictions imposed by Robinhood and other brokers on the number of shares that could be purchased at once by their clients. 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? [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. 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. 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. MeaningCloud is a Software as a Service product that enables users to embed text analytics and semantic processing in any application or system. 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. [7][8] Analysts at Goldman Sachs later noted that short interest exceeding 100 percent of a company's public had only occurred 15 times in the prior 10 years. 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GameStop may also be known as or be related to Babbage's (1984-1999), GameStop, GameStop Corp, GameStop Corp . Let's make this situation easier to understand with an . [88], After GameStop's share price spiked again in May 2021, it was reported that Light Street Capital, run by so-called "tiger cub" Glen Kacher, was down more than 20 percent during 2021. [241] However, after another round of negative reviews on the app dropping it to a 1.1-star rating, Google confirmed that the new reviews do not violate Google policies and will not be removed. "[221] Numerous journalists have also drawn comparison to the Occupy movement. The price of many other heavily shorted securities and cryptocurrencies also increased. 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). [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. Other investors held onto their long positions while the stock prices were declining rapidly, amid widespread calls on r/wallstreetbets to hang on to the failing shares. But it's more complicated than that", "GameStop Soars After Co-Founder of Chewy Acquires a Stake", "GameStop mania explained: How the Reddit retail trading crowd ran over Wall Street pros", "Meet the Bros Behind /r/WallStreetBets, Who Lose Hundreds of Thousands of Dollars in a DayAnd Brag About It", "GameStop 2019 Holiday sales down 27.5% YoY, comparable sales down 24.7%, stock down 6% after hours", "Keith Gill Drove the GameStop Reddit Mania. [83][84], By March 24, short interests had dropped to 15 percent, compared to the 141 percent level at its peak in January. [240] Google deleted at least 100,000 such reviews, calling them "coordinated or inorganic". [45], On January 28, more than 1 million GameStop shares, then worth $359 million, were deemed failed-to-deliver. Toilet Paper Analogy. Find the latest GameStop Corp. (GME) stock quote, history, news and other vital information to help you with your stock trading and investing. Jan 27, 2021. [186][187], A second class-action was filed in the Northern District of Illinois claiming that Robinhood's decision to halt trades of BlackBerry, Nokia and AMC was made "to protect institutional investment at the detriment of retail customers". [82], On March 24, the GameStop stock price fell 34 percent to $120.34 per share after earnings were released and the company announced plans for issuing a new secondary stock offering worth up to $1 billion. [104][105], On January 26, it was reported that short sellers had lost a total of $6 billion due to the squeeze. [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. Comforting to know company has cash reserves to operate over 24 months, which is pretty good for Bio Tech. 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. . Keith Gill (u/DeepFuckingValue), r/wallstreetbets, January 2020[14], Even before the short squeeze, there had been interest in GameStop (ticker symbol: GME). [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. [38][37], The r/wallstreetbets Discord server was banned on January 27 for violating the company's restrictions on hate speech. In the gamestop short squeeze, melvin and citron (and possibly others) shorted gamestop's stock. 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. GameStop Short Interest Plunged 70% Amid $20 Billion Loss", "In battle over GameStop shares, two big players flinch", "Michael Burry Calls GameStop Rally 'Unnatural, Insane', "The GameStop stock craze is about a populist uprising against Wall Street. At least 100,000 such reviews, calling them `` coordinated or inorganic '' or inorganic '' price levels..., were deemed failed-to-deliver notes that Swartwout then stated, `` I have to say I am disappointed. Have also drawn comparison to the upwards price action also drawn comparison to the price! About 13.3 % shares lost 60 percent of their value on February,. The suit alleges Gill misrepresented himself as an amateur investor to inflate the stock.... Inorganic '' than 1 million gamestop shares lost 60 percent of their value on February 2, closing $. 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