GameStop Short Squeeze

2021

Date: January 2021, peak 28 January · Place: r/wallstreetbets, Robinhood, NYSE · Figures: Keith Gill (DeepFuckingValue, Roaring Kitty) · Melvin Capital, Gabe Plotkin · Robinhood, Vlad Tenev · Tags: WSB, Short Squeeze, Memes As Capital 01. DFV's Position Keith Gill, posting on r/wallstreetbets as DeepFuckingValue and on YouTube as Roaring Kitty, has been long GameStop since 2019. By summer 2020 he is screenshotting his E*TRADE account on the subreddit, a position that grows from $53,000 of GME calls into something other people start to copy. By January 2021 Melvin Capital is short 140% of GameStop's float. WSB notices. The squeeze that follows is the first time a coordinated meme-economy crowd moves a stock against a hedge fund with enough force to threaten its existence. 02. $483 Then Robinhood Pulls The Buy Button GME prints $483 intraday on 28 January 2021. The same morning Robinhood and several other retail brokers restrict buying of GME, AMC, and a handful of meme tickers, citing clearinghouse collateral requirements. To WSB it looks like the casino unplugging the machine while the player is winning. Melvin Capital takes a $4.5B loss and shuts down by 2022. Keith Gill testifies before Congress on 18 February 2021 in his cat shirt. The phrase apes together strong moves from subreddit shitpost to congressional record. 03. The Vernacular Wins The squeeze does not, in the end, redistribute wealth from hedge funds to retail. Most apes who bought above $200 are still underwater. What it does redistribute is legitimacy. After GameStop, meme language is finance language. CNBC anchors say diamond hands on air without flinching. Era VII is the era when the joke and the trade are the same action. GameStop is the day this becomes undeniable. Sources • r/wallstreetbets, DeepFuckingValue position updates (2020-2021) • House Financial Services Committee, 'Game Stopped' hearing transcript (18 February 2021) • SEC Staff Report on Equity and Options Market Structure Conditions in Early 2021 (October 2021)