7:42
- ABC News
- February 13, 2021
A timeline of the GameStop stock saga
The stock market drama has been called a "David and Goliath" battle.
7:42
\"Stock back to $20 fast,\" the tweet added. \"We understand short interest better than you and will explain.\"
Citron on Jan. 21 said in a subsequent tweet that its Twitter feed had been hacked, but added that GameStop is \"going to $20 buy at your own risk.\"
The video Citron posted highlighting reasons GameStop will fall has since been deleted from the firm's YouTube page.
Too many people hacking Citron twitter, will record and post later today. $GME going to $20 buy at your own risk
— Citron Research (@CitronResearch) January 21, 2021
On Jan. 21, the stock closed at $43.03.
As the tug-of-war between the everyday investors and hedge funds heated up and support grew for GameStop on r/wallstreetbets, the stock skyrocketed more than 50% in the trading session on Jan. 22. It opened that day at $42.59 a share and closed at $65.01. During after hours and pre-market trading that weekend, the GameStop continued to climb. On Jan. 25, it opened at $96.73.
![\"PHOTO:](\"http://a.abcnews.com/images/Business/musk-rt-rc-210203_1612370969642_hpEmbed_3x2_384.jpg\")
Just after markets closed on Jan. 26, Elon Musk tweeted the term used heavily in the Reddit page to refer to GME -- \"Gamestonk!!\" -- and a link to the r/wallstreetbets forum.
Gamestonk!! https://t.co/RZtkDzAewJ
— Elon Musk (@elonmusk) January 26, 2021
The Tesla chief executive has some 44 million Twitter followers and was already a popular figure among users of the Reddit forum -- especially as Tesla stock soared in recent years despite questions over the company's actual valuation.
Earlier that same day, high-profile venture capitalist Chamath Palihapitiya also tweeted that he was investing in GameStop. His tweet garnered some 26,000 likes.
Shares soared by nearly 140% in after-hours trading. The stock opened on Jan. 27 at a whopping $354.83 a share.
Citron Capital and Melvin Capital, two firms shorting GameStop stock that were referenced heavily in the r/wallstreetbets forum, said on Tuesday that they were closing their positions.
Left of Citron Research made the announcement in a YouTube video, saying Citron Capital let go of the majority of their bets that GameStop stock would fall and took a \"100%\" loss in doing so.
\"This has captured the attention of America and every trader and non-trader alike,\" Left said. He added that he respects the market and has \"respect for the people on the Wall Street Bets and on Reddit message boards.\"
The manager of hedge fund Melvin Capital also on Wednesday admitted to CNBC that the fund was letting go of its GameStop shorts. Sources familiar with Melvin Capital confirmed to ABC News that the hedge fund lost 53% of its total investments in January.
The saga took an unexpected turn on Jan. 28 when retail trading platforms including Robinhood and TD Ameritrade abruptly restricted most transactions involving GameStop stock. TD Ameritrade said this was \"in the interest of mitigating risk\". Robinhood similarly cited volatility, but later said this decision was made based on clearinghouse-mandated deposit requirements that it said \"increased ten-fold.\"
\"It was not because we wanted to stop people from buying these stocks,\" Robinhood wrote in a company blogpost. \"We did this because the required amount we had to deposit with the clearinghouse was so large -- with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements -- that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements.\"
The move sparked immediate backlash and also triggered an extremely volatile trading day -- that saw shares reach their intraday peak of $483.00 -- before plunging down to $112.25 by the time markets closed.
Lawmakers and political figures on both sides of the aisle soon weighed in. Rep. Alexandria Ocasio-Cortez, D-N.Y., called the restrictions on GameStop \"unacceptable\" in a tweet. Ted Cruz, R-Texas, said that he agreed with her -- though they didn't end up agreeing to work together.
![\"PHOTO:](\"http://a.abcnews.com/images/Politics/aoc-file-1-ap-210_hpMain_20210202-052220_4x3t_384.jpg\")
The U.S. Securities and Exchange Commission on Jan. 29 issued a statement saying it is \"closely monitoring and evaluating the extreme price volatility of certain stocks' trading prices over the past several days.\"
The SEC's statement, however, did not mention any stocks, social media platforms or trading platforms by name, but said the agency \"will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws.\"
\"Market participants should be careful to avoid such activity,\" the statement added. \"Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.\"
White House Press Secretary Jen Psaki was even asked about controversy during a press briefing on Jan. 29, though Psaki deflected questions, pointing to the SEC statement.
Josh White, an assistant professor of finance at Vanderbilt University and a former economist for the Securities and Exchange Commission, told ABC News that he's skeptical the SEC will categorize the Reddit army's actions as market manipulation.
\"In this case, it's not clear that an internet chat room or a forum that says, 'Hey, we should all go buy this stock,' is manipulation,\" he said.
He added that in many ways \"there's really no difference\" between what this Reddit army did and what hedge funds or institutional investors do when they see a stock that is mispriced in some way.
After a drama-filled week that gripped the nation, the entertainment industry outlet Deadline reported that the saga was already being turned into a movie that was being produced by Tyler and Cameron Winklevoss (of \"The Social Network\" fame). MGM Studios shared Deadline the article on their site.
A few days later, Tyler Winklevoss tweeted a link to reports about the film and said that when the movie comes out he and his brother will be renting AMC theaters (another popular stock within r/wallstreetbets) for \"premiere parties.\"
When the r/wallstreetbets movie comes out, I'll be renting a bunch of $AMC theaters across the country w/ @cameron for premiere parties. We'll invite the actors for a Q&A and the party favors will be in-store $GME credits. It will be a grand old time!https://t.co/mxQWBOmJYh
— Tyler Winklevoss (@tyler) February 1, 2021
After it's precipitous rise the previous few weeks, on Feb. 2 GameStop stock opened some 50% down at $140.76 a share.
Vanderbilt professor White told ABC News that this \"David versus Goliath\" saga \"reflects a lot in our society\" amid a pandemic that has exacerbated income inequality.
Still, he expressed worry about what comes next -- and how GameStop falling will ultimately impact these individual investors and faith in the stock market at large.
\"We expect that eventually GameStop stock price will come down and some people will lose money when that happens for sure,\" he said. \"And my fear is that they'll view the stock market as being rigged and not being fair, and that they won't invest in the stock market.\"
Treasury Secretary Janet Yellen publicly addressed the saga during an interview with \"Good Morning America\" on Feb. 4, saying she was meeting with regulators to discuss if the agencies need to take \"further action.\"
\"I'm actually hosting a meeting later this morning with top regulators at the SEC and the Commodity Futures Trading Commission, and also the Federal Reserve to discuss recent developments,\" Yellen told ABC News' Robin Roberts. \"We really need to make sure that our financial markets are functioning properly, efficiently, and that investors are protected.\"
\"We're going to discuss these recent events and discuss whether or not the recent events warrant further action,\" she added.
Shortly after her comments on \"GMA,\" trading for GameStop opened at $91.19 a share. On Thursday afternoon, they closed at $53.33 a share.
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