Online traders battle Wall Street

A battle between so-called day traders, co-ordinated on Reddit, and Wall Street created a trading frenzy, inflicting billions of dollars of losses on “short-squeezed” hedge funds
               

Jan 11: GameStop Corp. appoints Chewy Inc. co-founder Ryan Cohen (right) to its board to develop digital sales

Jan 13: GameStop’s shares rise 57% to $31.40 driven by online forum Reddit’s WallStreetBets. 144.5 million shares change hands – up from 7 million on Jan 12. Many trades made by online broker Robinhood

Jan 14: Shares jump another 27% to $39.91 – four-day surge adds $1.2 billion in market value of
video game seller. Target price among analysts is only $12.50

Jan 19: Hedge funds short sell GameStop – borrowing shares from brokers who receive commission and interest on loan. Shares are sold at between $36-$45 – funds expect to buy back and return to broker when value falls to around $20

Jan 20: As shares rise, short sellers face mounting losses and high borrowing fees

Jan 22: Shares rise another 50%, 196.8 million shares change hands

Jan 25: Stock soars 144% with online traders storming in to buy more
    
Jan 26: Elon Musk encourages online traders, lashing out at short sellers and hedge funds

Jan 27, “short squeeze”: Hedge funds Melvin Capital and Citron Research are forced to close their positions and buy at a loss
                    
Jan 28: Robinhood blocks its users from buying stock in GameStop and 12 other companies

Jan 29: Hedge funds’ losses estimated at $5 billion


GameStop share price
Close $19.94	$31.40	$39.12	$65.01	147.98	$347.51	$492.02   Jan 28: Close at $193.60

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                JANUARY 2021


Sources: Bloomberg, Reuters 
Pictures: Associated Press, Bill Jerome 
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