GME back to life photo

After a two-week pause, GameStop’s stock resumed its feverish rally and more than doubled Wednesday as it rose to $91.70 from $52.41 in the final trading hour.

Since Feb. 19, the U.S. House of Representatives has begun its hearing to discuss the recent drastic changes in the market revolving around GameStop stock. CEOs of Reddit, the CEO of Robinhood and owners of hedge funds Citadel and Melvin Capital are some of those who have testified or are testifying at this hearing. The hearing aims to investigate market manipulation, and there should be heavy pressure on hedge funds for their role in not just in the initial GME short selling but what happened afterward as well. 

The situation with GME’s surge in late January was being planned as far back as September, 2020. Users on the subreddit r/Wallstreetbets found out that Citadel, a major hedge fund, had short positions in GameStop stock. “You know citadel, the MM that took all our money today?” an r/Wallstreetbets user said back in September while laying out plans and predictions for the short squeeze. “Well now we finally won’t be at the mercy of the MMs.” 

An aggressive army of Redditors took Wall Street hedge funds by storm with wild speculative bets in a massive investing mania that’s quickly becoming one of the most fascinating investing case studies ever. Here’s a detailed breakdown of what’s behind the out-of-control speculation as well as a look at the emotions — greed, fear, euphoria and panic — fueling the Wall Street bloodbath.


Short selling, the practice Citadel was participating in with GME, is when investors buy shares of a stock they think will become less valuable so they can sell the shares to other investors, and then after the price falls, they buy them back at a cheaper price while keeping the difference. The risk is that the prices could also rise, which would force the investor to buy back their stocks at a much higher price, potentially causing them to lose massive amounts. 

So when r/Wallstreetbets found out that one of its biggest adversaries was in a prime position to fail, it rallied together to buy and hold GME stock. The more people that bought GME, the more expensive it became, and the more the hedge funds lost because of their short position. 

In total, short sellers lost over $5 billion because of how valuable GME became. Citadel lost 2.75 billion and Melvin Capital lost 53% of its total value. 

It’s widely reported that after this loss, Citadel and others began lying to manipulate the market back in their favor. To try and distract individual investors from GME and make them sell to lower the stock’s price, they began a disinformation campaign using major media outlets to spread lies. 

News sources all over started running headlines like, “Silver prices surge as Reddit investors target precious metals.” r/Wallstreetbets subreddit was in outrage, responding with its own headlines like, “CNN BACK. OFF. This is a LIE. Literally a 5 second scroll of our board would inform this to be untrue.” 

And it was a lie. False reports were vastly circulated about how the members of r/Wallstreetbets were shifting their focus to silver, but this was completely untrue. The opposite was occurring as this group of investors was constantly expressing disdain for the idea and reminding its community not to fooled into selling their shares.

The subreddit quickly found out that Citadel is one of the biggest investors in Silver in the entire market and was trying to trick individual investors into buying it, making Citadels’ shares more valuable and allowing it to get the money back from the exact people it lost it to. 

This situation was partly caused by Citadel manipulating numbers and making it appear that Silver was being bought up in a squeeze like with GME but was enabled by the media sources that mindlessly spread the misinformation without even a simple check of the subreddit they were reporting on. Scrolling the r/Wallstreetbets subreddit for even a few seconds at this time would have informed any reporter that the popular narrative was untrue. 

Evan Holden is a sophomore political science major. Contact Evan at