It was the wildest month in recent financial history. The 1,745 per cent rise in value of GameStop, a bricks-and-mortar video game retailer – the US equivalent of Game or the long-departed Electronics Boutique – didn’t just upend the fortunes of a struggling shop, it refigured the financial markets and reset the balance of power between Wall Street and Main Street.
On one side were Wall Street veterans who believed they saw GameStop on its knees and were eager to eke out every penny they could in profit by betting it would go out of business – a practice called “short selling”. On the other, congregating and organising via the influential website Reddit, was a mob of makeshift investors on apps and websites that made access to stock exchanges easier than ever before, all looking to lash out at the financial markets and, in some cases, planning to make a quick buck while sticking it to the man.
But just how did a closed retailer that began 2021 valued at $17.25 (£12) a share end up changing hands at $483 (£345) just three weeks later? Who helped propel GameStop to unimaginable highs – and why did they do it? And what caused ordinary people to invest vast sums into a stock that then tanked, leaving them with massive losses?
The story starts with Reddit – the news aggregation and discussion site that was, itself, to double in share value due to its incredible impact in the affair – and a small community of committed traders on the discussion forum “subreddit” r/WallStreetBets.
GameStop share price: $3
Jaime Rogozinski, founder of the subreddit r/WallStreetBets: “I started WallStreetBets back in 2012 in an effort to fill a void for high-risk, high-return trades. I was 30 and single. I worked in a job that gave me decent -disposable income and I had the typical 401(K) for retirement. I wanted to take some of my money and put it to work in a way that was a bit more aggressive. I understood the risk. The forums that existed were too serious, so I set up a place that was more lighthearted, that was OK with losing money – something that, to this day, is still very difficult for some people to understand.”
The subreddit began small: in 2013 it had fewer than 2,000 subscribers, but grew steadily, with those engaging with the forum putting the advice they gleaned in action on the stock market through “retail trading” – the term used when individuals, sometimes with little experience, dabble in the stock market, often using websites and smartphone apps with names such as Robinhood, Etoro, Freetrade and Trading 212. In the industry, these people are known as “retail investors”.
Gil Shapira, chief investment officer at Etoro, a retail trading app, which many of those -trading from r/WallStreetBets used: “We’ve seen the volumes of retail [investors’ trades] increasing from ten per cent of the total volumes ten years ago to one out of four now.”
One of those retail investors, a 34-year-old man by the name of Keith Gill, went by “DeepFuckingValue” on Reddit and “Roaring Kitty” on YouTube. Gill used to work for the Massachusetts Mutual Life Insurance Company and began posting videos in mid-2020, explaining why he thought people should buy GameStop stock. At the time, it was trading at $4 a share.
David Madden, analyst at CMC Markets: “The long and the short of it is this: GameStop was in what could easily have been terminal decline for years and years and years. If you go back to around 2006 or 2007 – when the company was at its most profitable – it was priced around $60 a share. The pandemic really rocked GameStop. They were high-street focused and lockdowns -rattled the share price. In August 2020, it got down below $3 a share. It looked as if it could be on the way out.”
Andrew Left, founder of Citron Research, who has spent 20 years publishing reports about companies he believes were on a -downturn in an attempt to encourage other investors to join him in “shorting” stocks: “It’s overvalued. Greatly overvalued. I’m in the car with my ten-year-old. He’ll tell you: nobody goes to GameStop.”
GameStop share price: $17.25
Left scented blood, as did a number of other short-sellers – traders who bet on the value of a company falling by selling borrowed shares with a view to buying back their interest later at a lower price, thereby making a profit. As Margot Robbie famously explained in a bubble bath in The Big Short, short-sellers pursue increasingly risky returns by betting on failure. By the start of 2021, the value of the financial positions bought by short-sellers was 140 per cent the value of the number of GameStop shares actually available to buy and sell. In essence: some people who had “shorted” GameStop’s stock by betting on the value of it falling were borrowing shares that were already borrowed by other short-sellers. Not everyone in the financial world believed it was a good idea to pile into GameStop – not least as it had rebounded from its $3 low and was now trading at $17.25 a share.
Madden: “In hindsight, it’s a crazy red signal. Whenever a market gets too heavy one way, in that people are excessively short [overestimating how much it would drop] or long [-overestimating how much it would rise], that can -easily lead to large price swings, because all you need is a smallish price move to trigger a lot of activity.”
Marc Cohodes, a famous short-seller: “Maybe 30 years ago, when I was shorting Child World, a toy retailer that competed against Toys R Us and went bankrupt, there was a story one day that someone was going to take them over. When I called the guy to ask ‘Is there anything to it?’ he said, ‘You know I can’t say anything about it, Marc, but I will tell you this: people will pay $3 just to watch two rats fuck.’ Given inflation, in the year 2021, if you’re ever short and the story is played out, you shouldn’t still be hanging around at $3 or $4 [per share, expecting it to drop even further]. You should just move on. These greedy, overleveraged hedge funds sat there and all of a sudden found themselves in a real world of trouble.”
Fraser Perring, a short-seller who was not invested in GameStop and founder of short-selling advice firm Viceroy Research: “When you’re short, you can lose multiples of what you’re short because the share price can go to infinity [in which case, you have to buy at that inflated price to cover the borrowed shares you thought would decrease in price]. Whereas if you’re long, it can only go to zero. If you’re shorting a stock and you’re a retailer [ie, an app trader], the only thing I advise is make sure you can afford to be shorted. If it goes against you, you’re going to lose seven or eight times more than what you’re short. People forget that.”
Cohodes: “It’s a combination of greed and/or arrogance to not cover it, thinking they’re smarter than everyone else, which they’re not. They’re just overleveraged. Then lightning hit them.”
Left: “It was a bad two weeks of my life. I don’t want to relive it, really.”
GameStop share price: $19.94
On 11 January, GameStop announced it appointed three new members to its board of directors, including Ryan Cohen of RC Ventures, who had become a “sizeable stockholder of GameStop Corp”. Some saw it as a sign that GameStop’s fortunes could turn around. The stock price rose from $19.94 on Monday 11 January to $35.50 by the Friday of that week. The same day, December sales figures for video game retailers were released by The NPD Group. While those optimistic about GameStop’s future saw positivity in Cohen’s arrival, those pessimistic – including Left and Melvin Capital, a giant hedge fund – felt the sales data vindicated their belief.
Left: “The NPD data came out. They give you all the data about how everything does. It shows that while the video game industry had its best month ever in December, GameStop sales were down 90 per cent. The industry was up [27 per cent]. Disaster. This meant GameStop did not benefit from the console update, the new PlayStation and Xbox. That’s when I put out the report.”
Joshua Mitts, law professor at Columbia University: “To situate this historically, it’s important to start with a phenomenon over the last ten years, which is the rise of what some call short-seller activism. A short-seller who is placing a negative bet on a stock would take to social media in various forms. Sometimes it’ll be a website such as Seeking Alpha, which is popular with investors, sometimes it’ll be Twitter or other microblogging-type platforms. What a short-seller would do is say, ‘I have a story about why all of you should sell your stock.’
That would, in turn, lead to a mass panic, which social media would end up amplifying. One person would tweet and another person would tweet, ‘We have to sell the stock!’ This became a tried-and-true method of moving stock prices, using social media to basically get the crowd to stampede in one direction – in this case, down.
Left’s report highlighted his belief that GameStop would soon go out of business. He doubled down on the claims on social media, including a livestream.
Left: “I did a Twitter live video and I think 160,000 people tried to sign on in the first two minutes. And then I’m like, ‘Uh, OK. This is a lot bigger than I thought.’ I did an Instagram Live video and it just got completely bombarded. I should have realised at that moment, ‘Uh-oh, too many people. Get out.’”
Instead, Left tweeted on 19 January that people buying GameStop at its current price, now $39.36 a share, were “suckers at this poker game”.
Madden: “There’s sort of an attitude, pre-GameStop, that you don’t really fight the hedge funds because they’re the big boys. But this is why the GameStop story is so crazy. Because that’s exactly what happened. The Reddit gang of retail investors, some of whom wouldn’t have a huge amount of experience, drove up the share price to a crazy amount [by all buying GameStop shares] without really thinking about the fundamentals of it – the actual valuation.”
Left: “[The move] was a market phenomenon, coupled with a cultural phenomenon, -coupled with what people thought was empowering them, and people put aside rationality. Unfortunately, in the stock market, there should be a valuation scale. These are companies, at the end of the day.”
GameStop share price: $76.79
In the next week, the price rose from just under $40 to more than $65. On Friday 22 January, more than 197 million GameStop trades were recorded by the New York Stock Exchange. A day later, Keith Gill hosted a seven-hour livestream on YouTube seen by 877,296 people. Journalists started taking notice, writing about the incredible movement – which caused more people to invest in the stock, pushing the price higher again. GameStop opened trading on Monday 25 January at $96.73.
Adam Dodds, cofounder of Freetrade, a UK-based stock-trading app: “We were going into 2021 riding a wave, then the first week of January was our biggest week ever. The second week of January was our biggest week ever. It was already very busy. Everything was on max. Then Monday happened. I’ll be honest with you, I didn’t really know what was driving the crazy volumes initially. That Monday, all of a -sudden, the volumes were more than double our previous high.”
Left: “I personally learned there is a new group of people in this world who hide behind their computers, who will say or do anything to achieve an agenda, who don’t use rational thought. They’re willing to lose money with it. They think it’s a game.”
Dodds: “We looked at it and it was largely driven by meme stocks: GameStop, BlackBerry and what have you. It didn’t stop. It kept on going.”
Packy McCormick, a former investment -banking associate at Bank Of America Merrill Lynch, who now runs the Not Boring –investment newsletter: “A friend reached out and linked me to a story about the GameStop rise and said, ‘Is what they’re saying feasible?’ He’s like, ‘Before I start buying GameStop I need to understand, like, how does the short squeeze work? And, like, these different things that they’re saying might happen… Like, do they actually work?’”
A “short squeeze” happens when too many traders bet against the decline of a company. Someone eventually realises they’ve done it to such an extent that they can’t physically buy back the shares they’ve borrowed – theoretically meaning they could be forced to pay any price. The lack of supply forces up the price of a stock, usually very quickly. If a hedge fund had bought a million shares in GameStop at $5 a share, expecting it to drop further, but the price went up to $50 a share, they may be tempted to cut their losses by buying back at $50 a share, losing $45 million, rather than risking the price rising to $500 a share, when they’d be on the hook for $450m.
Emma, a software engineer from Massachusetts: “I don’t remember exactly the first [thing] I saw [about GameStop]. I think [it was] just through osmosis online. I’m sure I saw some tweets about it. TikTok was showing me a lot of stuff; a few video game podcasts I listen to were talking about it.”
Daniel Uribe, a college student from California: “I got a text message from one of my friends who is a finance major on Monday 25 January. He posted a picture of him up two or three thousand dollars. Obviously I like money, so I was like, ‘Hmm, what is this?’ What was convenient about my situation was I had just sold a laptop that day, so I had, like, $900 to be able to just put in. I split it in half between GameStop and AMC [Entertainment].”
Emma: “Coworkers were also talking about it a little bit. I’m sure my phone recommended some news articles about it to me. I knew of r/WallStreetBets, but had never lurked on it much before this.”
Sayem Ahmed, a UK-based social media staffer: I was seeing a lot of people on my timeline talking about GameStop stock surging. I missed out on the whole Bitcoin phase and was kicking myself. I had been paid and thought, ‘Why not?’ I opened up a Trading 212 account, deposited £100 into the account, then split it between a few stocks recommended on [chat app] Discord, including GameStop.”
Left: “Ironically, if you look at the amount of people who bought the stock, so far the credit card data [people actually buying things from GameStop] isn’t any greater. So nobody said, ‘Hey, let’s go buy something at the store.’ They just bought the stock. If they all bought something at the store, they could have made the stock go up for real.”
Ahmed: There wasn’t a tremendous amount of movement [on Monday 25 January]. But the next night, when I was having my tea, my partner was laughing at me because I was constantly checking Discord. I was really into it. I thought I was really making something out of this. Because I saw GameStop was consolidating massively, I went all in on GameStop. It ended up at $145 and I was chuffed. I stayed awake until 2am.”
GameStop share price: $147.98
On Tuesday 26 January, Elon Musk tweets a link to the r/WallStreetBets subreddit with one word: “Gamestonk!!” The share price rises and the number of comments on the subreddit rises from 116,000 on 25 January to 353,000 two days later. The volume of trades in GameStop rose to 178 million that day.
Emma: “I downloaded the Reddit app to keep up with r/WallStreetBets and used the money I already had in Robinhood to buy my first shares. I bought my first three GME [GameStop] shares on the 27th at $300. I knew it was a bad idea, but still figured there was a chance it would keep going up, and fuck hedge funds, if nothing else.
Ahmed: “I woke up at 8am [on Wednesday 27 January]. I checked the aftermarket [where non-retail, “institutional” investors can trade stocks after the market officially closes to ordinary -people] and saw GameStop had surged massively again. I thought, ‘Holy shit! I could pay off a bit of my loan with this.’”
Dodds: “Wednesday was our all-time high – it was double what we did on Monday.”
Madden: “At that point it’s complete mania. It was similar to watching Bitcoin back in late 2017, seeing it go from trading at $10,000 to a few days later trading at $14,000. I’m thinking, ‘This is dangerous. This is heading for a fall.’ This is what I mean [when I say] you’re not really applying the fundamentals of how you value a company, looking at its current earnings and current revenue and its realistic projections for revenue and earnings – does that equate with the current valuation? It didn’t. This was going to end badly for some people.”
Shapira: “We’re prepared all the time, but you can’t prepare yourselves fully for a situation where an asset increases by 120 per cent in a day. We were looking on the monitors and seeing this unprecedented event. A few times it crashed towards 60 per cent, then it increased again. It was a day of watching the screens, from the beginning of the trade until the end of the day.”
Madden: “It’s an exceptionally difficult thing to pinpoint the price at which the market was going to turn around. There’s a good argument to be made to say it was grossly overvalued at $100. That didn’t stop it going to $200, to $300… This is what I mean when I say seasoned investors would look at it and say, ‘It’s a bubble. Stay clear of it.’ Other people, retail investors new to the financial market, might think this is how it works. Some people are opening trading accounts just so they can trade this stock.”
Etoro sends out a message to its users on 27 January, reminding them stocks can go down as well as up. While many retail investors were starting to buy into the stock at this point, some of those who had bought their shares earlier in the month – or back in 2020 – were more than happy to sell their shares to the new arrivals at vastly inflated prices. Others held out, believing the price could rise further. Many on r/WallStreetBets peppered their posts with the rocket emoji, indicating their belief that the price of GameStop could go “to the moon”.
Ahmed: “Once these people like me are into something this massively, it feels like the old internet is back again. It feels like it’s 2004 and I’m on 4chan, maybe illegally DDoSing websites. It felt like I was sticking it to someone.”
Uribe: “I didn’t want to be the person who puts thousands of dollars in and says, ‘If it goes to zero, I don’t care – let’s burn those hedge funds.’ Which is a great message, or whatever, but, realistically, no hedge fund will [disappear]. It’s not going to cause the financial collapse of the entire economy. None of us are going to end up like the Joker, burning money in a giant pile.”
Ahmed: “It felt like I was mucking in. There was a sense of community about it. Everyone now has a collective goal. And it isn’t to get rich: it’s to get those hedge fund bastards broke.”
Left: “There are so many ways you could tell the story. One perspective would be the day the dog caught the car. You chase it: ‘Look, we’re going to get shorty. Look, we’re going to get shorty!’ You got shorty. Now what? Now you own the stock at $200, right?”
Shapira: “There are some days that we eat at our computer. I can assure you this day was good for the diet.”
Left: “It’s a mob mentality… You have to have rational thought on Wall Street. People thought they could somehow create a four-day
GameStop share price: $347.51
GameStop’s stock price rose 135 per cent on the day before, reaching $347.51 at the close of trading, more than 11,000 per cent up from the $3 or $4 a share it spent most of 2020 at. During the day, Left bought back most of the GameStop stock he had shorted, making a 100 per cent loss. Melvin Capital, who was also shorting GameStop, confirmed it, too, was cancelling its negative positions in the company. Separately, the Wall Street Journal reported that the hedge fund lost 53 per cent on its investments in January, according to people familiar with the firm. The Telegraph claimed Melvin Capital lost $7 billion because of the GameStop debacle. More than 93 million shares were traded on the day – almost three times the average volume. Trading on certain stocks, including GameStop, was halted right as the price peaked at $347.51.
Ahmed: “I was keen to see what price the market would be at 2.30pm [UK time, when the US market opened]. I managed to log in to Trading 212 at 2.30pm but, lo and behold, something wasn’t right. Trading 212 went down, presumably because so many people wanted access to the servers.”
Tchi Mbouani, a tech founder based in London: “I tried to log into my Trading 212 account towards 2.40pm but couldn’t. I wanted to withdraw money so I [could] pay my Self Assessment tax return before the Sunday deadline. Nothing to do with GME or AMC for me, thank God.”
Andy Thompson, who works in railway maintenance in Leicestershire: “I’m only a -small-time trader and relatively new to it all, as I only started trading in August last year. I try to study and research in my spare time around my full-time job and am just looking at making a bit of extra money with my spare money that I have set aside to trade.”
Ahmed: “I tried to put in a sell order for my 0.2 share of GameStop stock out of 1.2 and it just didn’t work. This left me in the position of thinking, ‘Is someone at Trading 212 afraid? What are they afraid of? People in their twenties investing money for the first time and making it?’”
Thompson: “I consider myself one of the lucky ones, as I was not in [GameStop]. However, I was financially affected by the servers being down, as there seemed to have been a general sell-off on most stocks. I was unable to do anything about it. Due to being unable to access my account on the day, I lost around £1,800 in gains, which may not seem like a lot, especially compared to those out there who lost out on tens or hundreds of thousands of their gains, but, to me, £1,800 is a lot of money.”
Mbouani: “[It’s] simply a despicable service. It should never be allowed and they should be fined by whatever authority they are regulated. Having a trading service down for four hours is simply intolerable.” >>
GameStop share price: $193.60
On 28 January, premarket trading of GameStop crossed $500 and stock was valued at $483 intraday, but few people could access their investments to buy or sell it. Generally, trading apps such as Robinhood have to post credit on deposit with the organisations that settle and clear trades. On a usual day it’s calculated at around $110m to $120m. That credit allows them to fund the trades their users make during a given day. But this day was different. Trading apps were being asked to pay way more and some decided to remove the risk by limiting how people could trade some of the most popular stocks on their platforms, as recommended by users on Reddit. Robinhood restricted trading that morning.
Jim Swartwout, chief operating officer of Robinhood Securities, the subsidiary of Robinhood that deals with the app’s cash flow: “I got woken up at 5.55am [New York time] by my treasury manager, who got the message. We immediately got everyone on the phone who needed to be on the phone to discuss what we were going to do to address it. We told them at that time that we were going to restrict both AMC [Entertainment, which was also popular with Reddit traders] and GME stock for new -purchases, because they were the bulk of our requirement. Every morning we receive from NSCC [the National Securities Clearing Corporation, which clears and settles trades on the US securities exchange market] and DTCC [the Depository Trust & Clearing Corporation, the NSCC’s parent company] a daily margin call. It’s either a credit or a debit, depending on the previous day’s trading. We had expected to have a higher than usual requirement, but what we received from the -system-generated NSCC invoice was a $1.4bn value-at-risk calculation – tenfold our normal. But on top of that they had added a $2.2bn special maintenance call. Our total was around $3.7bn.”
McCormick: “I thought there was not a chance in hell that Robinhood would actually stop retail traders from trading so that hedge funds could unwind their positions. Like, there’s just no way that you could possibly do that and live to tell about it.”
Swartwout: “Shortly thereafter, around 9.12am, we received an updated margin call from [the NSCC] for $1.4bn. It removed the special requirement [the extra $2.2bn] entirely. We -immediately paid that. We then went into the day with those two symbols [GameStop and AMC Entertainment] restricted. We then -monitored additional symbols that morning [who were proving popular on Reddit, including outmoded phone manufacturer BlackBerry]. In the meantime, on the back end, our CFO was raising additional funds so by Monday we could have additional money put into the broker-dealer.”
McCormick: “Robinhood failed to understand the chaos they created. The nature of these things is that if you unleash millions of people who’ve never done this before and they can also congregate on Twitter or Reddit or wherever else, things are just going to accelerate a lot more quickly than you’d expect.”
While Robinhood and others were forced to limit their trading of the so-called “meme stocks” on 28 January, or were taken offline by exceptional demand, Freetrade kept trading in the stocks open.
Dodds: “We were facing the most exceptional volumes we’ve ever seen on that Wednesday, then Thursday came and boom: it was ten times in the volume of new sign-ups. We committed to staying open for business and other brokers closed for business and stopped onboarding customers. I think we saw something like 40,000 sign-ups in one day, which was a lot.”
Rogozinski: “Watching what’s taking place, honestly, I feel a sense of pride in seeing the conversations that are taking place outside of the trading world. This is politicians chiming in. This is influential hedge fund managers. They’re starting to resonate [with] the feelings that have been pent up since  when the Occupy Wall Street movement was around. And, yeah, to some extent, I’m super happy to watch these conversations, because they’re long overdue.”
Now unable to get on to trading apps to buy in or out, retail investors were unable to capitalise on their potential windfall: from nearly 200 million trades on 22 January, restrictions meant there were only 59 million recorded on 28 January and the price began to plummet. By the end of the day, the price had fallen to $193.60 – and people were angry. Politicians in the United States began calling for an investigation into the behaviour of the markets and apps. They would eventually open an investigation into the chaos and the House Committee On Financial Services held its first hearing on 18 February.
Congressman Ro Khanna, who represents California’s 17th Congressional district: “We’re done letting hedge fund billionaires treat the stock market like their personal playground, then taking their ball home as soon as they lose.”
Senator Sherrod Brown, the new chairman of the US Senate Committee On Banking, Housing And Urban Affairs: “People on Wall Street only care about the rules when they’re the ones getting hurt. American workers have known for years the Wall Street system is broken – they’ve been paying the price.”
Khanna: “This entire episode has demonstrated the power of technology to democratise access to American financial institutions, ultimately giving far more people a say in our economic structures. This also showed how the cards are stacked against the little guy in favour of -billionaire Wall Street traders.”
Brown: “It’s time for the SEC [the US Securities And Exchange Commission] and Congress to make the economy work for everyone, not just Wall Street. That’s why, as incoming chair of the Senate banking and housing committee, I plan to hold a hearing to do that important work.”
Madden: “That was the beginning of the end. That’s a real sign the party is over, because you’re not going to have it as good as you did before, in terms of free access to that stock. If you do bump the share price up again, we now know they have form when it comes to tightening restrictions.”
But while customers of the retail trading apps waited for justice, they began to take out their frustration on social media. One woman, who ran the Twitter account of an organisation entirely unconnected to the chaos, but which shared a name, bore the brunt of the anger.
Lisa Douglas, social media manager of the World Wide Robin Hood Society: “I don’t understand any of it, I have to be completely honest. I thought I’d better put a tweet out just to say, ‘Lovely to have you, but just want to make sure you’re following us and not the Robinhood app.’ From that, it just really took off. It’s some responsibility now we’ve got 60,000 followers. We’d previously been ticking along with 350.”
Then, another investor came up with an idea.
Kaspar Povilanskas, cofounder of viral -marketing agency NowADays Media: “I invested in GameStop as well. I don’t really want to say how much I put in, but I bought at around $80 [a share]. Once Robinhood suspended trading, the people who were holding GameStop got screwed. Nobody was listening to them expressing their anger about this. Because we do it every day for brands, we felt strongly this was a message that needed a megaphone. We figured it would be hilarious if a plane flew around [Robinhood’s] HQ and if the CEO, by chance, saw the banner from his office and would think, ‘We are a little bit fucked here.’ We were going to fly something more generic at first, like ‘Buy GameStop’. But then we decided let’s tell Robinhood to suck our nuts, because that’s really how everyone feels in the community. It took a while to find a pilot who was willing to do it. The lady I was working with from [aerial advertising company] The Skywriters was on board too.”
Cristina Jacuzzi, owner of The Skywriters: “I have GameStop stock myself. I have BlackBerry invested: I got that about a year ago. I wanted to contribute so we could hit [Robinhood’s] headquarters. I’ve never invested in any of my -banners, ever. I’ve been doing this for 14 years and this is the first time. I felt pretty strongly about making a statement over there. It really was wrong. It was just wrong what they did.”
GameStop share price: $325
Friday 29 January began in the United States with the SEC, which was set up in the aftermath of the 1929 Wall Street Crash, releasing a statement saying it was “closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days”. But in the UK, the one app that managed to stay open received bad news: the company was told by the currency conversion partner that handles their trades they were too popular. Before, they were allowed to submit up to 1,500 trades converting British pounds to American dollars per minute. Because of excess demand, that would be limited – to just 80 trades a minute.
Dodds: “The next day, Friday, we woke up and at 10.30am [UK time] we got the call from one of our service providers saying that they were going to crush the [trade] bandwidth we had the previous day by 90 per cent. That was a difficult situation. I kind of sent out a company-wide communication saying this is going to be a bit of a mess, no matter what.”
Viktor Nebehaj, cofounder of Freetrade: “I went on Sky News, live, talking about how we are on the side of the retail customer and we are never going to limit things. ‘Treating customers fairly is our mantra. We are never going to limit stuff.’ Then, less than an hour after I come off the air, I get a ping on the internal Slack channel saying, ‘Dude, they are going to limit us entirely.’ My head exploded.”
Dodds: “We made the very tough decision to limit some stocks and some buying activity, so we were prioritising people [being] able to get out of positions and keep the rest of trading open so they could still buy and sell ETFs [exchange-traded funds] and UK stocks. With the heat of all this meme trading, we didn’t want to shut down for business. That Friday was the most stressful day of my entire life. It really did feel like the entire company was on the line.”
Meanwhile, Jacuzzi and Povilanskas finance a flight path that carries a sign reading “Suck my nuts Robinhood” past the trading app’s headquarters.
Povilanskas: “It felt like a mini revolution. But I don’t think anyone saw it at the [Robinhood] office. We found out that it was a work-from-home day.”
While the plane flew over Robinhood headquarters, retail investors also took out their frustration on the short-sellers, whom they felt were trying to destroy GameStop and were being protected by Wall Street when the going got tough.
Left: “You get a lot of access to information on the internet. What’s a threat and what’s not a threat is very unique. If I said, ‘Here’s your address and here’s where your kids go to school,’ it’s not saying anything, but it’s implying something. You know what I’m saying? There was a lot of ordering pizzas to my house and other things. Many [pizzas arrived]. I wasn’t home. But imagine people start knocking on your door…”
Rogozinski: “[Left] reached out to me [on] Friday. He was under attack. People were starting to dox him. He reached out to me, basically to try to understand what was taking place. He’s not new to the world of finance and not new to losing money. What was new was being in the crosshairs of the angry internet mob. Quite frankly, I sympathise with him; I know what it’s like to be in that position.”
Left: “I’m sure if I look hard enough I can find your address. But if I disagree with your stock point, you’re going to use it against me? To threaten me? It’s an amazing concept.”
Rogozinski: “He was vocal on social media; he was playing the game. But it changed really quickly. Now, it’s about his family and that’s a red line you don’t want to cross. He ended up backing away from the spotlight, saying it’s not worth it. It became really personal.”
Left: “I have one name for you: Mark David Chapman [John Lennon’s murderer]. That name hit me. We lost a great one from one whack job. I wonder how many people now have lost money on GameStop and will blame it on me, because they bought at $200. People always look for someone to blame it on.”
Perring: “Some of [my friends] had small trades and lost a couple of million. I’ll read you [some texts]: ‘Hi, Fraser. Looking at GameStop. Looks to me it’ll go out of business eventually.’ I replied, ‘You have to be fucking mad to short this at 20 bucks.’ I said, ‘This may go down eventually, but it’s going way the fuck up first.’ He goes, ‘Good job I listened to you: I’ve put my order to $403,000 short.’ I said, ‘I wouldn’t even have a dollar short.’ He replies, ‘I think I might follow your advice, so I got it back to $100,000.’ He still lost $2m.”
GameStop share price: $63.77
Between 1 February and 5 February, GameStop’s share price dropped from $225 to $63.77. It’s still far higher than the price the firm spent most of 2020 at, but it didn’t continue rising as people thought it would. Retail investors who had bought in at the stock’s height via apps began to sell their positions in the company.
Uribe: “The reason I sold was I saw it going down. I saw it at $140. I put a limit at $130 and so I sold it at $130. I think I only made, I don’t know, like, $200 out of all of this. It could have been $2,700. But that’s the game.”
Emma: “I bought seven more [GameStop shares] at $333 on 29 January and ten more at $130 on 2 February. [I’m] currently down almost $4,000, which is certainly not the worst compared to a lot of people, but, also, I feel pretty dumb.”
Uribe: “This isn’t exactly the revolution.”
McCormick: “So what do we learn from this? This is not going to be the last one of these. I
don’t know if it’ll look exactly the same.
I don’t know if it’ll be retail vs hedge fund. I
don’t know what it will be. But things don’t get less chaotic over time. And so I think there has to be more preparedness across the board: if -something like this happens, how does the -system respond to it?”
Madden: “I think some retail investors will go, ‘Wow, this is easy to make money in the stock market.’ Some will look and think, ‘Wow, you can lose a lot of money really quickly in the stock market.’ For me, working in financial markets for a living, my thought is, ‘Wow, hedge funds no longer rule the roost.’ Previously, hedge
funds have had years and years of being able to put tremendous pressure on a company, drive a stock down, and no one would dare stand up to them. Now, a lot of fund managers around the world and high-risk traders who work for big banks are looking at it and thinking, ‘Wow, the little guy can put us in our place.’”
McCormick: “It does point to this idea: don’t break capitalism with whining or whatever else. Make capitalism. Build a better system, where the people who create value get that value.”
The story of r/WallStreetBets’ rebellion against the financial markets has been bought by Hollywood. Rogozinski’s life story has been optioned for a film, while Netflix is producing a version starring former Disney Channel star Noah Centineo. The rights to a still-to-be-written book by journalist Ben Mezrich – author of The Accidental Billionaires, the book on which David Fincher’s The Social Network was based – has been optioned by a Hollywood studio to be made into a film. All of this happened within days of the events unfolding.
Left: “It’s funny: people are trying to make all these movies about this. The truth is I wouldn’t even co-operate with the movie. Why make myself even more of a target? There are people who lost money here. There are real victims of this whole thing. I just said, ‘When you make a movie, how does it end?’ They said, ‘We’ll find out.’”
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