The GameStop battle – how it unfolded for the key players testifying

Business

Top executives from hedge funds and the Robinhood trading platform will appear before a U.S. House panel on Thursday to explain how a flood of retail trading drove shares of GameStop and other stocks to extreme highs, squeezing short sellers who had bet against them.

Here is a timeline of the stock’s rapid 1,600% rise, the social media-fueled retail activity that helped drive it, and how firms like hedge funds Citadel and Melvin Capital, along with retail brokerages like Robinhood, played a part in the action.

Oct. 2019: Major retail brokers drop trading commissions, a model Robinhood helped pioneer by relying on payments from market making firms for revenue in exchange for their customers’ buy and sell orders, ushering in a boom in retail trading.

July 27, 2020: Roaring Kitty, aka Keith Gill, starts posting YouTube videos on GameStop here, saying he sees value in the heavily shorted stock he had been investing in since June 2019. Gill also posts on the Reddit forum WallStreetBets under the name DeepF***ingValue, according to an interview in the Wall Street Journal.

Dec 8, 2020: GameStop shares tank after company misses Wall Street estimates for quarterly revenue as pandemic-led store closures and intense competition from digital-game sellers hit sales.

Jan 11: GameStop appoints Chewy.com founder and two other e-commerce veterans to its board in a deal with investor Ryan Cohen’s RC Ventures, as it doubles down on digital sales

Jan 12: Short interest at 70.9 mln shares, down from 71.2 mln on Jan 8, per S3 Partners. Notional value of short bets rose to $1.4 bln from $1.3 bln, reflecting the rising stock price

Jan 13: GameStop shares rise 57%, followed by another 27% jump the next day to $39.90. Its median target price among analysts is $12.50.

Jan 19: Short seller Citron Research takes aim. Tweets about GameStop, saying buyers at these levels are “the suckers at this poker game” and stock “back to $20 fast.”

Jan 20: Citron Research delays negative report, says it does not want to go live with its report on the stock

Jan 22: Shares rise another 50%.

Jan 25: GameStop stock soars as much 144% then settles up 18% with retail traders storming in to buy more.

Jan 25: Hedge fund Melvin Capital Management receives $2.75 billion investment from Citadel, the Chicago-based hedge fund led by Ken Griffin, and billionaire investor Steven A. Cohen’s Point72 Asset Management, after losing on a series of short bets, including on GameStop. Griffin also founded Citadel Securities, one of several market making firms that pays to execute customer orders from Robinhood.

Jan 26: Elon Musk tweets “Gamestonk!!”, along with a link to Reddit’s Wallstreetbets stock trading discussion group, where supporters refer to the Tesla CEO as “Papa Musk.” here

Jan 26: Shares surge 92.7%. Top securities regulator in Massachusetts reportedly says trading in GameStop suggests there is something “systemically wrong” with the options trading.

Jan 27: Trading volumes in U.S. cash equities and options hit all-time record levels at 24.5 billion shares traded and 57.1 million contracts traded.

Jan 27: GameStop hits a closing high of $347.51.

Jan 27: Melvin Capital and Citron close the majority of their GameStop position at a loss.

Jan 28: Robinhood, along with several other brokerages, restricts trading in GameStop and a handful of stocks after the regulatory deposit requirements for settling the securities skyrocket. With buying restricted at many brokerages, but selling allowed, the stocks sell off.

Jan 28: The U.S. House Financial Services and Senate Banking committees says to hold a Feb. 18 hearing on the stock market following the trading restrictions.

Jan 29: Robinhood begins easing trading restrictions on stocks caught up in the so-called Reddit rally.

Feb 1: Robinhood raises $2.4 billion in capital after raising $1 billion the previous week.

Feb 2: U.S. Treasury Secretary Janet Yellen calls meeting of top financial regulators to discuss market volatility driven by retail trading in GameStop and other stocks.

Feb 4: Robinhood removes all trading curbs. The following day, GameStop hits a session high of $95 and closes up 19.20% at $63.77.

Feb 9: GameStop trading at around $40 a share.

Feb 18: U.S. House panel holds hearing titled: “Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide here.”