What happened
In late January 2021, retail investors organized on Reddit's r/wallstreetbets community drove a historic short squeeze in GameStop (GME) shares, which soared from roughly $17 at the start of the month to an intraday high of about $483 on January 28. The rally was fueled in part by Keith Gill, known on Reddit as 'DeepF***ingValue,' who had publicly documented a GameStop position that ballooned from around $53,000 to tens of millions of dollars. The buying frenzy inflicted billions in losses on hedge funds, including Melvin Capital, that had heavily shorted the struggling retailer.
At the height of the squeeze on January 28, brokerage Robinhood and others abruptly restricted buying of GME and other 'meme stocks' while still allowing sales, triggering accusations of market manipulation, class-action lawsuits and a congressional investigation. In February, the House Financial Services Committee held a hearing titled 'Game Stopped?' featuring Gill, Robinhood CEO Vlad Tenev and Citadel's Ken Griffin. The saga became a defining moment in the rise of retail-driven, socially coordinated trading.