By CATHERINE THORBECKE, ABC News
(NEW YORK) — It was a so-called “David and Goliath” showdown that captured the attention of the world and ushered in the dawn of a new age for Wall Street.
But how did GameStop, a struggling video game retailer making headlines for shuttering stores, find itself at the center of a crusade that seemingly pitted the haves against the have-nots in the arena of the stock market?
In a new documentary released on Hulu on Monday, ABC News Originals examines each turn in the rollercoaster saga that unfolded when an army of Reddit users banded together to take on institutional Wall Street firms.
“The Wall Street bets saga was a movement,” Reddit CEO Steve Huffman said in the documentary. “The people who didn’t previously feel they had a voice finding that they do have a voice and they can make an impact.”
“And by raising their voices together, it can shine a light on areas of our society, and of this case in our financial system, where a light — needs to be shined,” he added.
In late January, individual investors loosely organized on the subreddit r/wallstreetbets to push shares of GameStop to new highs using do-it-yourself trading platforms such as Robinhood. Their collective efforts — and fuel from investing celebrities such as Elon Musk — sent the stock soaring and forced hedge funds who bet against the company to back down in what’s known as a “short squeeze.”
“It became a story of ‘us versus them,’ ‘little guy versus hedge funds,’” Jim Chanos, the president and founder of the firm Kynikos Associates, said. “Those become dangerous. Wall Street can be a very expensive place to act out a morality play.”
At first, it appeared victory was at hand for the so-called “little guys” investors, until Robinhood and many other online brokerages abruptly restricted purchasing shares of GameStop at the height of the mania. Meanwhile, the “big guys” — hedge funds, for example — could still buy the stock as they pleased through their own trading platforms, leading to a chorus of accusations that the whole system is “rigged.”
But the little guys didn’t back down quietly, and some of the major players in the saga were eventually called to testify before Congress. Robinhood maintains that it did not act at the urging of any market players when it restricted certain trades, but said the decision was due to financial clearinghouse-mandated deposit requirements that increased amid the volatility.
Robinhood CEO Vlad Tenev also speaks out in the documentary, defending his company’s actions and responding to those who say he should “go to jail.”
“I think it was based on this false premise that was harmful of me somehow colluding with hedge funds to do this, which was completely made up out of thin air,” Tenev said.
“There’s no evidence for it,” he added. “And I think it was completely wrong.”
Cameron Winklevoss, the cryptocurrency investor also known for his The Social Network fame, said the drama “was sort of this realization that the individual investor, the dawn of that investor, is here.”
While the initial frenzy surrounding GameStop stock’s meteoric rise and fall may have ended, those involved say the impact and influence of individual investors is likely here to stay.
Individual investor Alicia Haverland, who is known on Reddit as “proptart666” and is still holding onto some 200 GameStop shares, said the events “put Wall Street on notice.”
“We got in the room in a system that is designed for you to never be in the room,” she said. “And we are. And now you have to deal with us.”
Watch “GameStopped” exclusively on Hulu starting on Monday, March 15.
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