What really happened to GameStop?

Описание: The January 2021 “meme stock” phenomenon was unprecedented in recent US market history. Following a series of steady, low-volume gains early in the year, shares in GameStop-- a thinly-traded, poorly performing retailer--jumped 18% on January 25th, another 92% the following day and 134% on January 27th, when the stock closed at a still-record high of $347.51 each, valuing the money-losing video game retailer at $22.67 billion.

The gains prompted rallies in stocks such as AMC Entertainment, Kohl's and Bed Bath & Beyond, triggered trading restrictions and capital calls on broker-dealers by clearing agencies, Congressional hearings on the fair treatment of retail investors by Wall Street hedge funds and market-makers, and a probe into stock price manipulation by the SEC.

Explanations for what happened were plentiful, ranging from a classic “short-squeeze” to the power of social media to motivate small retail investors, but facts were in short supply. The SEC found that a short squeeze or “gamma squeeze” in the options markets didn’t explain trading and price changes, concluded that everything worked largely the way it was supposed to and recommended no specific changes. But a recent report by legal and business academics reached a different conclusion about the role of short-selling and suggests that market policies may need adjustment.

What really happened to GameStop stock trading in late January 2021? What issues with market structure did it reveal? And what lessons should market participants and regulators learn from the experience?

Join our panelists as we look behind the headlines.