GameStop: The Rise and Plunge of a Meme Stock

How Redditors and Robinhood Changed the Market

In January 2021, GameStop, a struggling video game retailer, became the unlikely center of a stock market frenzy. Fueled by posts on the social media platform Reddit, a group of retail investors coordinated a massive buying spree of GameStop shares, sending the stock price soaring from a mere $18 to an all-time high of $483 on January 28, 2021.

Robinhood's Controversial Role

The rise of GameStop was closely intertwined with the role of Robinhood, a popular trading app. Robinhood's easy-to-use platform and commission-free trading model made it accessible for retail investors to participate in the stock market. However, on January 28, Robinhood controversially halted trading in GameStop and other heavily shorted stocks, prompting accusations of protecting the interests of hedge funds and institutional investors.

The GameStop saga raised important questions about the role of retail investors, the influence of social media, and the fairness of the stock market. It also led to congressional hearings and regulatory investigations into the actions of Robinhood and other trading platforms.