GameStop Short Squeeze - Revision history

Bananabot: Added archive URLs for 8 citation(s) using CRWCitationBot

2026-02-23T05:11:12Z

Added archive URLs for 8 citation(s) using CRWCitationBot

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	The '''GameStop short squeeze''' of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.<ref>{{Cite web \|title=GameStop short squeeze \|url=https://en.wikipedia.org/wiki/GameStop_short_squeeze \|website=wikipedia.com}}</ref>		The '''GameStop short squeeze''' of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.<ref>{{Cite web \|title=GameStop short squeeze \|url=https://en.wikipedia.org/wiki/GameStop_short_squeeze \|website=wikipedia.com \|archive-url=http://web.archive.org/web/20260215155355/https://en.wikipedia.org/wiki/GameStop_short_squeeze \|archive-date=15 Feb 2026}}</ref>

	==Background==		==Background==

	===GameStop’s struggles and short interest===		===GameStop’s struggles and short interest===
	GameStop, a brick-and-mortar video game retailer, had been struggling due to competition from digital game sales and the COVID-19 pandemic’s impact on in-person shopping. By 2020, institutional investors heavily shorted the stock, betting its price would fall further. At its peak, 140% of GameStop’s public float was sold short, meaning some shares were borrowed and shorted multiple times.<ref name=":0">{{Cite web \|last=Dziak \|first=Mark \|date=2024 \|title=GameStop short squeeze \|url=https://www.ebsco.com/research-starters/business-and-management/gamestop-short-squeeze \|website=EBSCO.com}}</ref>		GameStop, a brick-and-mortar video game retailer, had been struggling due to competition from digital game sales and the COVID-19 pandemic’s impact on in-person shopping. By 2020, institutional investors heavily shorted the stock, betting its price would fall further. At its peak, 140% of GameStop’s public float was sold short, meaning some shares were borrowed and shorted multiple times.<ref name=":0">{{Cite web \|last=Dziak \|first=Mark \|date=2024 \|title=GameStop short squeeze \|url=https://www.ebsco.com/research-starters/business-and-management/gamestop-short-squeeze \|website=EBSCO.com \|archive-url=http://web.archive.org/web/20260107035353/https://www.ebsco.com/research-starters/business-and-management/gamestop-short-squeeze \|archive-date=7 Jan 2026}}</ref>

	===The role of r/WallStreetBets and retail investors===		===The role of r/WallStreetBets and retail investors===
	The sub[[reddit]], r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web \|last=Stewart \|first=Emily \|date=September 29, 2023 \|title=Dumb Money and what actually happened with GameStop, explained \|url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|website=Vox.com}}</ref>		The sub[[reddit]], r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web \|last=Stewart \|first=Emily \|date=September 29, 2023 \|title=Dumb Money and what actually happened with GameStop, explained \|url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|website=Vox.com \|archive-url=http://web.archive.org/web/20260210060715/https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|archive-date=10 Feb 2026}}</ref>

	Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web \|last=Winter \|first=Velvet \|date=October 27, 2023 \|title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic \|url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|website=abc.net.au}}</ref>		Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web \|last=Winter \|first=Velvet \|date=October 27, 2023 \|title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic \|url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|website=abc.net.au \|archive-url=http://web.archive.org/web/20250825203612/https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|archive-date=25 Aug 2025}}</ref>

	===Short squeeze mechanism===		===Short squeeze mechanism===
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	Retail investors bought shares and call options en masse.		Retail investors bought shares and call options en masse.

	Hedge funds like Melvin Capital (which had a large short position) were forced to buy back shares at soaring prices, amplifying the rally.<ref name=":0" /><ref>{{Cite web \|last=Kwansoo \|first=Kim \|last2=Tom Lee \|first2=Sang-Yong \|last3=Kauffman \|first3=Robert \|date=May 23, 2023 \|title=Social informedness and investor sentiment in the GameStop short squeeze \|url=https://pmc.ncbi.nlm.nih.gov/articles/PMC10203679/ \|website=nih.gov}}</ref>		Hedge funds like Melvin Capital (which had a large short position) were forced to buy back shares at soaring prices, amplifying the rally.<ref name=":0" /><ref>{{Cite web \|last=Kwansoo \|first=Kim \|last2=Tom Lee \|first2=Sang-Yong \|last3=Kauffman \|first3=Robert \|date=May 23, 2023 \|title=Social informedness and investor sentiment in the GameStop short squeeze \|url=https://pmc.ncbi.nlm.nih.gov/articles/PMC10203679/ \|website=nih.gov \|archive-url=http://web.archive.org/web/20251104214644/https://pmc.ncbi.nlm.nih.gov/articles/PMC10203679/ \|archive-date=4 Nov 2025}}</ref>

	At its peak on January 28, 2021, GameStop’s stock hit $483 intraday, up from $17.25 at the start of the month.<ref>{{Cite web \|last=Niu \|first=Max \|date=June 21, 2025 \|title=The GameStop Short Squeeze: Retail Investors, Market Mechanics, and the Decline of a Legacy Business Model \|url=https://research-archive.org/index.php/rars/preprint/view/2648 \|website=research-archive.org}}</ref>		At its peak on January 28, 2021, GameStop’s stock hit $483 intraday, up from $17.25 at the start of the month.<ref>{{Cite web \|last=Niu \|first=Max \|date=June 21, 2025 \|title=The GameStop Short Squeeze: Retail Investors, Market Mechanics, and the Decline of a Legacy Business Model \|url=https://research-archive.org/index.php/rars/preprint/view/2648 \|website=research-archive.org \|archive-url=http://web.archive.org/web/20250708163352/https://research-archive.org/index.php/rars/preprint/view/2648 \|archive-date=8 Jul 2025}}</ref>

	==Short squeeze==		==Short squeeze==
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	*Robinhood was protecting hedge funds at the expense of retail traders.		*Robinhood was protecting hedge funds at the expense of retail traders.
	*The move was influenced by Citadel Securities, a major market maker and Robinhood’s order-flow partner, which also had ties to Melvin Capital.<ref name=":1">{{Cite web \|last=DeChesare \|first=Brian \|date=February 2021 \|title=The GameStop Short Squeeze: Why Almost Everyone is Wrong About It \|url=https://mergersandinquisitions.com/gamestop-short-squeeze/ \|website=mergersandinquisitions.com}}</ref>		*The move was influenced by Citadel Securities, a major market maker and Robinhood’s order-flow partner, which also had ties to Melvin Capital.<ref name=":1">{{Cite web \|last=DeChesare \|first=Brian \|date=February 2021 \|title=The GameStop Short Squeeze: Why Almost Everyone is Wrong About It \|url=https://mergersandinquisitions.com/gamestop-short-squeeze/ \|website=mergersandinquisitions.com \|archive-url=http://web.archive.org/web/20251225213941/https://mergersandinquisitions.com/gamestop-short-squeeze/ \|archive-date=25 Dec 2025}}</ref>
	*Robinhood claimed the restrictions were due to clearinghouse deposit requirements, not collusion, but the incident damaged its reputation and led to multiple lawsuits and congressional hearings.<ref name=":1" /><ref>{{Cite web \|last=Malz \|first=Allan \|date=2021 \|title=The GameStop Episode: What Happened and What Does It Mean? \|url=https://www.cato.org/cato-journal/fall-2021/gamestop-episode-what-happened-what-does-it-mean \|website=Cato.org}}</ref>		*Robinhood claimed the restrictions were due to clearinghouse deposit requirements, not collusion, but the incident damaged its reputation and led to multiple lawsuits and congressional hearings.<ref name=":1" /><ref>{{Cite web \|last=Malz \|first=Allan \|date=2021 \|title=The GameStop Episode: What Happened and What Does It Mean? \|url=https://www.cato.org/cato-journal/fall-2021/gamestop-episode-what-happened-what-does-it-mean \|website=Cato.org \|archive-url=http://web.archive.org/web/20260124071526/https://www.cato.org/cato-journal/fall-2021/gamestop-episode-what-happened-what-does-it-mean \|archive-date=24 Jan 2026}}</ref>

	===GameStop's response===		===GameStop's response===

Bythmusters: added cargo

2026-02-02T19:55:23Z

added cargo

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			{{IncidentCargo
			\|Company=Citadel Securities, Robinhood Financial
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	The '''GameStop short squeeze''' of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.<ref>{{Cite web \|title=GameStop short squeeze \|url=https://en.wikipedia.org/wiki/GameStop_short_squeeze \|website=wikipedia.com}}</ref>		The '''GameStop short squeeze''' of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.<ref>{{Cite web \|title=GameStop short squeeze \|url=https://en.wikipedia.org/wiki/GameStop_short_squeeze \|website=wikipedia.com}}</ref>

Rudxain: link to Robinhood Financial

2026-01-06T08:46:49Z

link to Robinhood Financial

← Older revision		Revision as of 08:46, 6 January 2026
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	==Short squeeze==		==Short squeeze==
	Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention. On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:		Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention. On January 28, trading platforms like [[Robinhood_Financial\|Robinhood]] restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:

	*Robinhood was protecting hedge funds at the expense of retail traders.		*Robinhood was protecting hedge funds at the expense of retail traders.

Rudxain: fix stray "}}"

2026-01-06T08:44:34Z

fix stray "}}"

← Older revision		Revision as of 08:44, 6 January 2026
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	==Short squeeze==		==Short squeeze==
	Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention.}}On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:		Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention. On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:

	*Robinhood was protecting hedge funds at the expense of retail traders.		*Robinhood was protecting hedge funds at the expense of retail traders.

Rudxain: "subreddit" link to Reddit

2026-01-06T08:41:54Z

"subreddit" link to Reddit

← Older revision		Revision as of 08:41, 6 January 2026
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	===The role of r/WallStreetBets and retail investors===		===The role of r/WallStreetBets and retail investors===
	The ~~subreddit~~, r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web \|last=Stewart \|first=Emily \|date=September 29, 2023 \|title=Dumb Money and what actually happened with GameStop, explained \|url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|website=Vox.com}}</ref>		The sub[[reddit]], r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web \|last=Stewart \|first=Emily \|date=September 29, 2023 \|title=Dumb Money and what actually happened with GameStop, explained \|url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|website=Vox.com}}</ref>

	Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web \|last=Winter \|first=Velvet \|date=October 27, 2023 \|title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic \|url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|website=abc.net.au}}</ref>		Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web \|last=Winter \|first=Velvet \|date=October 27, 2023 \|title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic \|url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|website=abc.net.au}}</ref>

AnotherConsumerRightsPerson: /* Short squeeze */ removed placeholder box.

2025-09-16T19:08:25Z

Short squeeze: removed placeholder box.

← Older revision		Revision as of 19:08, 16 September 2025
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	==Short squeeze==		==Short squeeze==
	~~{{Placeholder box\|Change this section's title to be descriptive of the incident.~~

	Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention.}}On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:		Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention.}}On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:

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	===GameStop's response===		===GameStop's response===
	{{Placeholder box\|If applicable, add the proposed solution to the issues by the company.}}		{{Placeholder box\|If applicable, add the proposed solution to the issues by the company.}}


	==Lawsuit==		==Lawsuit==

DzLamme at 00:07, 10 July 2025

2025-07-10T00:07:28Z

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	The GameStop short squeeze of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.		The '''GameStop short squeeze''' of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.<ref>{{Cite web \|title=GameStop short squeeze \|url=https://en.wikipedia.org/wiki/GameStop_short_squeeze \|website=wikipedia.com}}</ref>

	==Background==		==Background==

46.213.5.172: /* [Company]'s response */

2025-07-06T22:39:17Z

[Company]'s response

← Older revision		Revision as of 22:39, 6 July 2025
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	==Background==		==Background==

	=== GameStop’s struggles and short interest ===		===GameStop’s struggles and short interest===
	GameStop, a brick-and-mortar video game retailer, had been struggling due to competition from digital game sales and the COVID-19 pandemic’s impact on in-person shopping. By 2020, institutional investors heavily shorted the stock, betting its price would fall further. At its peak, 140% of GameStop’s public float was sold short, meaning some shares were borrowed and shorted multiple times.<ref name=":0">{{Cite web \|last=Dziak \|first=Mark \|date=2024 \|title=GameStop short squeeze \|url=https://www.ebsco.com/research-starters/business-and-management/gamestop-short-squeeze \|website=EBSCO.com}}</ref>		GameStop, a brick-and-mortar video game retailer, had been struggling due to competition from digital game sales and the COVID-19 pandemic’s impact on in-person shopping. By 2020, institutional investors heavily shorted the stock, betting its price would fall further. At its peak, 140% of GameStop’s public float was sold short, meaning some shares were borrowed and shorted multiple times.<ref name=":0">{{Cite web \|last=Dziak \|first=Mark \|date=2024 \|title=GameStop short squeeze \|url=https://www.ebsco.com/research-starters/business-and-management/gamestop-short-squeeze \|website=EBSCO.com}}</ref>

	=== The role of r/WallStreetBets and retail investors ===		===The role of r/WallStreetBets and retail investors===
	The subreddit, r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web \|last=Stewart \|first=Emily \|date=September 29, 2023 \|title=Dumb Money and what actually happened with GameStop, explained \|url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|website=Vox.com}}</ref>		The subreddit, r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web \|last=Stewart \|first=Emily \|date=September 29, 2023 \|title=Dumb Money and what actually happened with GameStop, explained \|url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review \|website=Vox.com}}</ref>

	Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web \|last=Winter \|first=Velvet \|date=October 27, 2023 \|title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic \|url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|website=abc.net.au}}</ref>		Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web \|last=Winter \|first=Velvet \|date=October 27, 2023 \|title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic \|url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 \|website=abc.net.au}}</ref>

	=== Short squeeze mechanism ===		===Short squeeze mechanism===
	A short squeeze occurs when a heavily shorted stock rises in price, forcing short sellers to buy shares to cover their positions, further driving up the price.		A short squeeze occurs when a heavily shorted stock rises in price, forcing short sellers to buy shares to cover their positions, further driving up the price.

Line 25:		Line 25:
	Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention.}}On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:		Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention.}}On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:

	* Robinhood was protecting hedge funds at the expense of retail traders.		*Robinhood was protecting hedge funds at the expense of retail traders.
	* The move was influenced by Citadel Securities, a major market maker and Robinhood’s order-flow partner, which also had ties to Melvin Capital.<ref name=":1">{{Cite web \|last=DeChesare \|first=Brian \|date=February 2021 \|title=The GameStop Short Squeeze: Why Almost Everyone is Wrong About It \|url=https://mergersandinquisitions.com/gamestop-short-squeeze/ \|website=mergersandinquisitions.com}}</ref>		*The move was influenced by Citadel Securities, a major market maker and Robinhood’s order-flow partner, which also had ties to Melvin Capital.<ref name=":1">{{Cite web \|last=DeChesare \|first=Brian \|date=February 2021 \|title=The GameStop Short Squeeze: Why Almost Everyone is Wrong About It \|url=https://mergersandinquisitions.com/gamestop-short-squeeze/ \|website=mergersandinquisitions.com}}</ref>
	* Robinhood claimed the restrictions were due to clearinghouse deposit requirements, not collusion, but the incident damaged its reputation and led to multiple lawsuits and congressional hearings.<ref name=":1" /><ref>{{Cite web \|last=Malz \|first=Allan \|date=2021 \|title=The GameStop Episode: What Happened and What Does It Mean? \|url=https://www.cato.org/cato-journal/fall-2021/gamestop-episode-what-happened-what-does-it-mean \|website=Cato.org}}</ref>		*Robinhood claimed the restrictions were due to clearinghouse deposit requirements, not collusion, but the incident damaged its reputation and led to multiple lawsuits and congressional hearings.<ref name=":1" /><ref>{{Cite web \|last=Malz \|first=Allan \|date=2021 \|title=The GameStop Episode: What Happened and What Does It Mean? \|url=https://www.cato.org/cato-journal/fall-2021/gamestop-episode-what-happened-what-does-it-mean \|website=Cato.org}}</ref>

	===~~[Company]~~'s response===		===GameStop's response===
	{{Placeholder box\|If applicable, add the proposed solution to the issues by the company.}}		{{Placeholder box\|If applicable, add the proposed solution to the issues by the company.}}

DzLamme: Background, incident

2025-07-06T02:42:48Z

Background, incident

New page

The GameStop short squeeze of early 2021 was one of the most dramatic financial events in recent history, pitting retail investors against Wall Street hedge funds and exposing deep tensions in market structures.

==Background==

=== GameStop’s struggles and short interest ===
GameStop, a brick-and-mortar video game retailer, had been struggling due to competition from digital game sales and the COVID-19 pandemic’s impact on in-person shopping. By 2020, institutional investors heavily shorted the stock, betting its price would fall further. At its peak, 140% of GameStop’s public float was sold short, meaning some shares were borrowed and shorted multiple times.<ref name=":0">{{Cite web |last=Dziak |first=Mark |date=2024 |title=GameStop short squeeze |url=https://www.ebsco.com/research-starters/business-and-management/gamestop-short-squeeze |website=EBSCO.com}}</ref>

=== The role of r/WallStreetBets and retail investors ===
The subreddit, r/WallStreetBets (WSB), a forum known for high-risk trading discussions, became the epicenter of a coordinated retail investor movement. Users, led by figures like Keith Gill, argued that GameStop was undervalued and that a short squeeze could be triggered by mass buying.<ref>{{Cite web |last=Stewart |first=Emily |date=September 29, 2023 |title=Dumb Money and what actually happened with GameStop, explained |url=https://www.vox.com/money/2023/9/15/23873474/dumb-money-gamestop-stock-keith-gill-melvin-capital-review |website=Vox.com}}</ref>

Gill had invested heavily in GameStop as early as 2019, sharing his bullish thesis online. By January 2021, his $53,000 investment had ballooned to $48 million as the stock surged.<ref>{{Cite web |last=Winter |first=Velvet |date=October 27, 2023 |title=Here's the story behind Dumb Money and how a group of Redditors made billions on the stock market during the pandemic |url=https://www.abc.net.au/news/2023-10-28/what-is-dumb-money-about-gamestop-short-squeeze-explainer/102991894 |website=abc.net.au}}</ref>

=== Short squeeze mechanism ===
A short squeeze occurs when a heavily shorted stock rises in price, forcing short sellers to buy shares to cover their positions, further driving up the price.

Retail investors bought shares and call options en masse.

Hedge funds like Melvin Capital (which had a large short position) were forced to buy back shares at soaring prices, amplifying the rally.<ref name=":0" /><ref>{{Cite web |last=Kwansoo |first=Kim |last2=Tom Lee |first2=Sang-Yong |last3=Kauffman |first3=Robert |date=May 23, 2023 |title=Social informedness and investor sentiment in the GameStop short squeeze |url=https://pmc.ncbi.nlm.nih.gov/articles/PMC10203679/ |website=nih.gov}}</ref>

At its peak on January 28, 2021, GameStop’s stock hit $483 intraday, up from $17.25 at the start of the month.<ref>{{Cite web |last=Niu |first=Max |date=June 21, 2025 |title=The GameStop Short Squeeze: Retail Investors, Market Mechanics, and the Decline of a Legacy Business Model |url=https://research-archive.org/index.php/rars/preprint/view/2648 |website=research-archive.org}}</ref>

==Short squeeze==
{{Placeholder box|Change this section's title to be descriptive of the incident.

Impartial and complete description of the events, including actions taken by the company, and the timeline of the incident coming to the public's attention.}}On January 28, trading platforms like Robinhood restricted purchases of GameStop and other "meme stocks" (e.g., AMC, BlackBerry), allowing only sales. The decision spark public outrage with accusations that:

* Robinhood was protecting hedge funds at the expense of retail traders.
* The move was influenced by Citadel Securities, a major market maker and Robinhood’s order-flow partner, which also had ties to Melvin Capital.<ref name=":1">{{Cite web |last=DeChesare |first=Brian |date=February 2021 |title=The GameStop Short Squeeze: Why Almost Everyone is Wrong About It |url=https://mergersandinquisitions.com/gamestop-short-squeeze/ |website=mergersandinquisitions.com}}</ref>
* Robinhood claimed the restrictions were due to clearinghouse deposit requirements, not collusion, but the incident damaged its reputation and led to multiple lawsuits and congressional hearings.<ref name=":1" /><ref>{{Cite web |last=Malz |first=Allan |date=2021 |title=The GameStop Episode: What Happened and What Does It Mean? |url=https://www.cato.org/cato-journal/fall-2021/gamestop-episode-what-happened-what-does-it-mean |website=Cato.org}}</ref>

===[Company]'s response===
{{Placeholder box|If applicable, add the proposed solution to the issues by the company.}}

==Lawsuit==
{{Placeholder box|If applicable, add any information regarding litigation around the incident here.

===Claims===
Main claims of the suit.

===Rebuttal===
The response of the company or counterclaims.

===Outcome===
The outcome of the suit, if any.}}

==Consumer response==
{{Placeholder box|Summary and key issues of prevailing sentiment from the consumers and commentators that can be documented via articles, emails to support, reviews and forum posts.}}

==References==
{{reflist}}

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The "Incidents" category is not needed.}}