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01-23
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Meme Stocks Turn 5. Will There Ever Be Another GameStop?
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Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"media_name":"Dow Jones","id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1769149500,"share":"https://ttm.financial/m/news/2605435426?lang=en_US&edition=fundamental","pubTime":"2026-01-23 14:25","market":"us","language":"en","title":"Meme Stocks Turn 5. Will There Ever Be Another GameStop?","url":"https://stock-news.laohu8.com/highlight/detail?id=2605435426","media":"Dow Jones","summary":"Five years after GameStop shareholders launched a revolt, Wall Street has adapted and may have won the war.","content":"<html><head></head><body><p style=\"text-align: start;\">Five years ago, investors in a videogame retailer teetering toward bankruptcy nearly toppled the global financial system.</p><p>The so-called GameStop revolution inspired books, countless blogs, TV specials, and even a Hollywood film. But for a short time, financial markets were headed toward a far more dramatic conclusion.</p><p>“Wall Street would have collapsed,” says Thomas Peterffy, the billionaire founder and chairman of Interactive Brokers. “We were sitting there, really, really shaking in our pants.”</p><p style=\"text-align: start;\">Peterffy says brokerages like <a href=\"https://laohu8.com/S/IBRK\">Interactive Brokers</a> had a lot of customers who purchased <a href=\"https://laohu8.com/S/GME\">GameStop</a> stock on margin at low prices. Those shares were fair game for the brokers to loan out to short sellers, who bet that they could pay back the loan in the future by buying the stock at a lower price.</p><p style=\"text-align: start;\">If those margin customers sitting on large paper gains sold a fraction of their shares to pay back their loans, the brokers who lent out the relevant stock would be forced to recall the shares. Short selling in GameStop infamously outnumbered the total number of shares available for trading, so brokers would have needed to rush to the market and “bid it up to infinity,” Peterffy says. The system wouldn’t be able to handle that kind of spiral.</p><p style=\"text-align: start;\">“I expected that it would happen,” Peterffy says of such a spiral in the price of GameStop shares. “Of course, I didn’t know that these people didn’t know what the rules were.”</p><p>In fact, the GameStop investors had a new set of motivations—hold the stock no matter what. That stubborn approach may have protected the system from collapse.</p><p style=\"text-align: start;\">Five years later, the mechanisms that would have allowed that spiral are still unpatched, Peterffy says. Though the GameStop saga initially inspired aspirations for big changes on Wall Street, the actual results have been a mixed bag. Regulators scrambled to patch leaks in the financial system; brokers raced to capture a surge in demand from retail customers; the underlying companies capitalized on meme stock traders; and Wall Street, as it often does, found its way back to the top.</p><p style=\"text-align: start;\">For many individuals, the GameStop saga permanently changed what it means to invest. Trading volumes from retail investors soared during the meme craze and have remained elevated ever since. Brokerage firms are in an arms race to keep up with this increasingly sophisticated clientele, who have discovered the excitement—and often short-term rewards—of speculation across stocks, cryptocurrencies, sports betting, and, most recently, prediction markets.</p><h2 id=\"id_3787259194\" style=\"text-align: start;\">Plugging Regulatory Leaks</h2><p style=\"text-align: start;\">Shares of GameStop hit a record high—a split-adjusted $120.75 a share on Jan. 28, 2021. It was the same day that brokerages like <a href=\"https://laohu8.com/S/HOOD\">Robinhood Markets</a> and Interactive Brokers halted purchases of GameStop and other highly shorted stocks. The firms said they were responding to a surge in deposit requirements from the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation, which clears trades.</p><p style=\"text-align: start;\">The move killed momentum in meme stocks; retail traders, regulators, executives, and members of Congress have been dealing with the fallout ever since.</p><p style=\"text-align: start;\">“Now, it’s a matter of opinion whether or not that trading halt ended up protecting customers or harming customers,” says Amanda Fischer, who served as chief of staff for Gary Gensler, the chair of the Securities and Exchange Commission during the Biden administration. “But I can tell you, a large number of customers were very upset that they didn’t get access to those trades.”</p><p>The trading halt sparked a wave of congressional hearings and provided the SEC with plenty of ammo to reform markets. Gensler says the halts represented a market failure. “That was really bad.”</p><p style=\"text-align: start;\">“You really want to lower the risk of that. Access to the market is a fundamental tenet of good, clean, fair, efficient markets,” he says.</p><p style=\"text-align: start;\">Five years later, Gensler says the risk of everyday investors being shut off from their brokerage accounts is “far less likely” following SEC rule changes to improve clearinghouse efficiency under the Biden administration, including the move to T+1, which shortened the time trades take to settle to one day from two days. That said, “it’s not impossible. You get a very big stress event like a brokerage firm failing, a client might be cut off from their account,” Gensler says. “But I think the events of those days, we took that risk way down.”</p><p>The SEC’s report on the January 2021 events identified four areas for potential study and further consideration: 1) forces that may cause a brokerage to restrict trading; 2) digital-engagement practices and payment for order flow; 3) trading in dark pools and through wholesalers; 4) short selling and market dynamics.</p><p style=\"text-align: start;\">Ultimately, Gensler issued dozens of rules after his April 2021 confirmation, including disclosures tied to short sales and stock loans.</p><p style=\"text-align: start;\">Many of those rules have been delayed by lawsuits or withdrawn by the Trump administration.</p><p>“Honestly, I think it’s very hard for regulators to address these issues given the current litigation environment,” says Fischer, who now serves as policy director at Better Markets.</p><p style=\"text-align: start;\">Interactive Brokers has suggested a handful of rule changes that Peterffy argues would fix the vulnerabilities in the financial system that the GameStop saga exposed. First is a daily publication of short interest. Another proposal would make the margin required on short selling to increase as the short interest rises. Currently, a short seller must put 150% of the value of a short sale in a margin account, which includes the price of the sale and an additional 50% of the value. Peterffy wants that additional maintenance margin requirement to rise as the short interest increases above 50%</p><p style=\"text-align: start;\">Another rule proposed by Interactive Brokers would limit the ability to open new positions when the short interest hits 100%. As it stands, short interest could theoretically rise to multiples of the shares available for trading, as the same borrowed stock goes from one short seller to the next.</p><p style=\"text-align: start;\">More generally, the 2021 meme craze raised broad questions about fairness in markets.</p><p style=\"text-align: start;\">The SEC faced some calls to ban payment for order flow, the controversial practice where market makers pay brokerages for the right to match buyers and sellers so they can profit on the difference. Payment for order flow underpins commission-free trading, but it has also been described by many, including Gensler, as a conflict of interest.</p><p style=\"text-align: start;\">Gensler says the better option was to lower the cost of the market by reducing the minimum price increment for a stock quote to a half cent from a penny and lower the fees exchanges charge for access to one-tenth of a cent per share from three-tenths.</p><p>“I really thought it was better to lower the cost of the market,” Gensler says. “The half penny versus a penny might not sound like a lot, but that’s 50%. And we lowered access fees by 67%. These things are big.”</p><p style=\"text-align: start;\">A court upheld the tick size and exchange fees rules, but the SEC under Paul Atkins pushed compliance to November 2026. “In light of potential uncertainty created by the litigation, market participants may need additional time to prepare for compliance,” Atkins said in October.</p><p style=\"text-align: start;\">The Trump SEC withdrew 14 rules proposed during the Biden administration, including some related to reforming stock trading, subjecting crypto platforms to stock exchange rules, and the use of predictive analytics and “gamification” by brokerages apps.</p><p style=\"text-align: start;\">“The agenda reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority,” Atkins said in a statement this past year.</p><h2 id=\"id_378299020\" style=\"text-align: start;\">Retail’s Resilience</h2><p style=\"text-align: start;\">One good thing to come out of GameStop was that it got some retail investors more involved in the process, Fischer says. We the Investors, an organization co-founded by Dave Lauer, a longtime advocate for retail investors, has sent more than 10,000 comment letters to the SEC, advocating for things like transparency and fairness in markets, investor choice and control, best execution, as well as better settlement and clearing.</p><p style=\"text-align: start;\">“It really exposed the guts of the market to people that had never paid much attention to it up until then,” says Lauer, who is also the co-founder of Urvin Finance. “Like a lot of things on Wall Street, I think it exposed a lot of unfairness, a lot of rent-seeking and a lot of regulatory capture. And I think those things really resonated.”</p><p>Retail participation has remained a major force in markets, driving big moves in everything from electric vehicles to anything that touches artificial intelligence.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/54e41ddf987adf70ef717f9e0ff4051c\" tg-width=\"968\" tg-height=\"652\"/></p><p>Though some investors stuck around in GameStop and <a href=\"https://laohu8.com/S/AMC\">AMC Entertainment Holdings</a>, other meme traders found new targets. In July, meme stock investors calling themselves the “Open Army” swarmedOpendoor Technologiesand turned activist: They rallied against former CEO Carrie Wheeler and in favor of co-founder Keith Rabois. Wheeler left the company in August, and Rabois joined the firm’s board with co-founder Eric Wu in September. Shares have traded sideways ever since.</p><p style=\"text-align: start;\">Then there’s crypto.</p><p style=\"text-align: start;\">“Everything that happened in GameStop is happening in crypto markets but on steroids,” says Fischer. “As chaotic as GameStop was, it’s even more chaotic and there’s less oversight in the crypto market.”</p><p style=\"text-align: start;\">A resurgence in meme stock chatter this past year led Roundhill Investments to relaunch its <a href=\"https://laohu8.com/S/MEME\">MEME Stock ETF</a>, which first launched in December 2021—right around a short-term peak for the Nasdaq. The tech-heavy index fell 33% in 2022, and the ETF was closed in November 2023.</p><p style=\"text-align: start;\">Roundhill CEO Dave Mazza says this time, the ETF is actively managed and rebalanced at least weekly. The firm is targeting a universe of stocks with high implied volatility and interest among the retail investor community.</p><p>“In today’s meme stock world, it’s really more so about cutting-edge themes,” Mazza says. “It’s more about themes that retail can kind of be the price-setter in.”</p><p style=\"text-align: start;\">Meanwhile, brokerages like Robinhood, Interactive Brokers, and Charles Schwab have been engaged in an arms race to meet customer needs.</p><p style=\"text-align: start;\">“Overall, the customer base is becoming much more sophisticated,” Interactive’s Peterffy says. “People certainly learned a lot about the market. That’s for sure.”</p><p style=\"text-align: start;\">Robinhood says that 90% of the 2.5 million accounts it added in January 2021 are still on the platform.</p><p>The brokerage was up to 26.9 million funded customers in November 2025. Steve Quirk, Robinhood’s chief brokerage officer, tells <em>Barron’s</em> that many of the people who came into Robinhood through meme stocks have grown up a bit getting involved in retirement accounts, high-yield savings accounts, and other less exciting avenues of investing.</p><p style=\"text-align: start;\">“We have kept up with them,” Quirk says. “And it’s sort of their evolution. They were 20-something-year-olds. Now, maybe they’re in their 30s. And they’re sort of progressing along the path that a lot of people take with respect to investing.”</p><p style=\"text-align: start;\">There’s even been a bit of a shift on Reddit, the online platform that birthed the rowdy WallStreetBets forum. A Reddit spokesperson says the personal-finance group has seen a 117% increase in posts and comments from the end of 2020 through 2025. The investment interest group, which is led by rowdier subreddits like WallStreetBets and Superstonk but also includes the stocks and investing forums, has seen a 49% uptick in posts and comments from the end of 2020 through the end of 2025.</p><p style=\"text-align: start;\">Fidelity, among Wall Street’s more conservative firms, is using Reddit to reach users on its own investment forum. “I think that’s a massive difference that you wouldn’t have seen in 2021,” says Rob Gaige, Reddit’s global head of Insights.</p><p style=\"text-align: start;\">Likewise, brands that were once shunned by Reddit users are now being embraced on the platform. “They’re really adding tremendous value, and I think are becoming an essential part of how Reddit works,” Gaige says.</p><h2 id=\"id_5544620\" style=\"text-align: start;\">The More Things Change…</h2><p style=\"text-align: start;\">Despite all the new tools and platforms, the central character in the January 2021 GameStop saga doesn’t think retail investors are in a better spot than five years ago.</p><p style=\"text-align: start;\">“Retail investors have more access, but they don’t have the same advantages as institutional capital,” says Ryan Cohen, who joined GameStop’s board on Jan. 11, 2021, as a private investor, sparking the stock’s furious rally. “They don’t have the size. In many ways, it’s still very similar to the way it was before. But I’d say, generally, incentives are a big part of the problem.”</p><p style=\"text-align: start;\">“There’s more institutional money than ever,” adds Cohen, who became GameStop’s chairman in June 2021 and its CEO two years later. “It’s concentrated in hedge funds, private equity, these gigantic pools of capital. And when you have capital that’s that concentrated, and you’ve got these money managers that are collecting fees—and in most cases, it’s not really tied to much—it distorts prices, and it distorts behavior.”</p><p>The Wall Street titans of the GameStop saga have done well. Melvin Capital, the short seller that retail investors wanted to squeeze the most, shut down a year after GameStop’s peak. But founder Gabe Plotkin has remade himself as a sports executive, leading a group that bought the Charlotte Hornets National Basketball Association team in 2023. He told the Mislaibeled podcast last year that “at the end of the day, life’s pretty good.”</p><p style=\"text-align: start;\">His mentor Steve Cohen also caught plenty of flak from retail investors when Point72 Asset Management joined Ken Griffin’s Citadel to invest $2.75 billion for noncontrolling revenue share in Melvin. Cohen’s $8.1 billion plan with Hard Rock for a casino complex near Citi Field was approved by New York’s gaming commission in December.</p><p style=\"text-align: start;\">For Griffin, CNBC reported that his Citadel hedge fund was set to return $5 billion in profit early this year. The boom in retail trading has also been great for Griffin’s market-making firm, Citadel Securities.</p><h2 id=\"id_2792712193\" style=\"text-align: start;\">GameStop 2.0</h2><p style=\"text-align: start;\">One area where things have changed drastically in the five years since January 2021 are the balance sheets of some of the meme stock companies themselves.</p><p style=\"text-align: start;\">The original meme stocks were targeted by investors in part because they had high short interests. At the time, short sellers were betting big against physical retailers and companies that faced liquidity problems that were exacerbated by pandemic shutdowns.</p><p style=\"text-align: start;\">“What was unique about this meme stock phenomenon, from where we sat as distressed-credit investors, is that there were a lot of companies that had seen their revenue decline materially, or even go to zero, for a period of time due to Covid,” says Jason Mudrick, founder of hedge fund Mudrick Capital Management.</p><p style=\"text-align: start;\">Mudrick Capital was one of the firms that actually made money on the meme stock phenomenon, by lending firms money and buying their debt on the open market for pennies on the dollar.</p><p style=\"text-align: start;\">“They’re both still in existence because they went out and raised a tremendous amount of capital off of a very inflated stock price and utilized the irrational behavior of the mass market, the mass forces there, to capitalize their business and avoid insolvency,” Mudrick says of GameStop and AMC.</p><p style=\"text-align: start;\">Cohen says, “The business would be bankrupt by now, that’s for sure,” if he hadn’t got involved. “It would look like all the other retailers that have gone bankrupt. It’s a long list: J.C. Penney. RadioShack. Circuit City.”</p><p style=\"text-align: start;\">Though GameStop shares pulled back from their late-January peak, the stock has stayed well above where it traded in 2020. The higher prices provided the company an opportunity to sell billions of dollars in stock, which GameStop has used to significantly pay down long-term debt.</p><p style=\"text-align: start;\">“They were one of the smart meme stock companies that took big advantage of the moves and sold a lot of equity,” says Jim Chanos, the famed short seller and founder of Kynikos Associates. “They liquefied their balance sheet and gave themselves a cushion, which was a very, very smart thing to do. A lot of meme stocks and short-squeeze stocks more recently have not done that.”</p><p style=\"text-align: start;\">The company ended the third quarter of 2025 with $8.8 billion in cash, cash equivalents, and marketable securities. It also held $519.4 million in Bitcoin. The company has $4.16 billion in long-term debt. Though AMC is still navigating a massive debt load, the theater chain has so far managed to avoid bankruptcy by issuing stock.</p><h2 id=\"id_3717826442\" style=\"text-align: start;\">Adapt or Die</h2><p style=\"text-align: start;\">While retail investors hunt for the next GameStop, Wall Street managers are trying their best to avoid one.</p><p style=\"text-align: start;\">“It was a humbling experience for a lot of sophisticated financial investors to see such an irrational behavior driving markets so violently,” says Mudrick. “A lot of people lost a lot of money, and some very smart investors got put out of business because of this meme stock phenomenon.”</p><p style=\"text-align: start;\">While long/short funds haven’t stopped shorting, managers are much more aware of the risk of a stock becoming the next GameStop on social media, according to Mudrick. “Everybody’s got a tremendous amount of tools in place to understand that risk,” he says. “And that was not something anybody really focused on.”</p><p style=\"text-align: start;\">One of those tools is VandaTrack. Vanda, the independent research firm that specializes in positioning and flow, began developing its tool to track retail investor activity in 2020. It launched in early 2021, just as Wall Street scrambled to find tools to better understand the meme stock crowd.</p><p style=\"text-align: start;\">Viraj Patel, partner and deputy head of research at Vanda, says institutional investors now keep tabs on retail data for risk management and idea generation. He says the first question clients often have when a short starts squeezing is whether retail is behind it.</p><p style=\"text-align: start;\">“It’s still a pretty new science,” says Patel. “I don’t think anyone has quite solved how to think about, but at the same time, more and more people just cannot afford to not stay on top of it.”</p><p style=\"text-align: start;\">Abnormal retail flows can also act as an early warning system for clients who are invested in frothier parts of the market favored by retail. He says VandaTrack flagged abnormal flows in stocks that surged in early September and early October before pulling back later in the fall.</p><p style=\"text-align: start;\">Sell-side and buy-side trading desks use third-party providers like Vanda to keep tabs on which single stocks have the largest retail following, and how they have been trending over time, says Jeffrey Favuzza, vice president of equities trading at Jefferies. Even just opening X (formerly Twitter) has become a way for traders to suss out unexplained moves, Favuzza says.</p><p style=\"text-align: start;\">When retail investors do pile into a stock, companies now have a game plan. Mudrick says companies, on his advice, have put paperwork in place to quickly issue stock if the meme crowd swoops in. The process can take months to push through, so firms need to plan in advance or risk missing out on the chance to capitalize on a surge.</p><p style=\"text-align: start;\">“We’ve learned from it that this can happen, and these companies should be ready,” Mudrick says. “And I think that’s very common. I think the lawyers are advising their clients that you should do this, so I do think it has changed things in that everybody is now prepared.”</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Meme Stocks Turn 5. Will There Ever Be Another GameStop?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMeme Stocks Turn 5. Will There Ever Be Another GameStop?\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2026-01-23 14:25</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p style=\"text-align: start;\">Five years ago, investors in a videogame retailer teetering toward bankruptcy nearly toppled the global financial system.</p><p>The so-called GameStop revolution inspired books, countless blogs, TV specials, and even a Hollywood film. But for a short time, financial markets were headed toward a far more dramatic conclusion.</p><p>“Wall Street would have collapsed,” says Thomas Peterffy, the billionaire founder and chairman of Interactive Brokers. “We were sitting there, really, really shaking in our pants.”</p><p style=\"text-align: start;\">Peterffy says brokerages like <a href=\"https://laohu8.com/S/IBRK\">Interactive Brokers</a> had a lot of customers who purchased <a href=\"https://laohu8.com/S/GME\">GameStop</a> stock on margin at low prices. Those shares were fair game for the brokers to loan out to short sellers, who bet that they could pay back the loan in the future by buying the stock at a lower price.</p><p style=\"text-align: start;\">If those margin customers sitting on large paper gains sold a fraction of their shares to pay back their loans, the brokers who lent out the relevant stock would be forced to recall the shares. Short selling in GameStop infamously outnumbered the total number of shares available for trading, so brokers would have needed to rush to the market and “bid it up to infinity,” Peterffy says. The system wouldn’t be able to handle that kind of spiral.</p><p style=\"text-align: start;\">“I expected that it would happen,” Peterffy says of such a spiral in the price of GameStop shares. “Of course, I didn’t know that these people didn’t know what the rules were.”</p><p>In fact, the GameStop investors had a new set of motivations—hold the stock no matter what. That stubborn approach may have protected the system from collapse.</p><p style=\"text-align: start;\">Five years later, the mechanisms that would have allowed that spiral are still unpatched, Peterffy says. Though the GameStop saga initially inspired aspirations for big changes on Wall Street, the actual results have been a mixed bag. Regulators scrambled to patch leaks in the financial system; brokers raced to capture a surge in demand from retail customers; the underlying companies capitalized on meme stock traders; and Wall Street, as it often does, found its way back to the top.</p><p style=\"text-align: start;\">For many individuals, the GameStop saga permanently changed what it means to invest. Trading volumes from retail investors soared during the meme craze and have remained elevated ever since. Brokerage firms are in an arms race to keep up with this increasingly sophisticated clientele, who have discovered the excitement—and often short-term rewards—of speculation across stocks, cryptocurrencies, sports betting, and, most recently, prediction markets.</p><h2 id=\"id_3787259194\" style=\"text-align: start;\">Plugging Regulatory Leaks</h2><p style=\"text-align: start;\">Shares of GameStop hit a record high—a split-adjusted $120.75 a share on Jan. 28, 2021. It was the same day that brokerages like <a href=\"https://laohu8.com/S/HOOD\">Robinhood Markets</a> and Interactive Brokers halted purchases of GameStop and other highly shorted stocks. The firms said they were responding to a surge in deposit requirements from the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation, which clears trades.</p><p style=\"text-align: start;\">The move killed momentum in meme stocks; retail traders, regulators, executives, and members of Congress have been dealing with the fallout ever since.</p><p style=\"text-align: start;\">“Now, it’s a matter of opinion whether or not that trading halt ended up protecting customers or harming customers,” says Amanda Fischer, who served as chief of staff for Gary Gensler, the chair of the Securities and Exchange Commission during the Biden administration. “But I can tell you, a large number of customers were very upset that they didn’t get access to those trades.”</p><p>The trading halt sparked a wave of congressional hearings and provided the SEC with plenty of ammo to reform markets. Gensler says the halts represented a market failure. “That was really bad.”</p><p style=\"text-align: start;\">“You really want to lower the risk of that. Access to the market is a fundamental tenet of good, clean, fair, efficient markets,” he says.</p><p style=\"text-align: start;\">Five years later, Gensler says the risk of everyday investors being shut off from their brokerage accounts is “far less likely” following SEC rule changes to improve clearinghouse efficiency under the Biden administration, including the move to T+1, which shortened the time trades take to settle to one day from two days. That said, “it’s not impossible. You get a very big stress event like a brokerage firm failing, a client might be cut off from their account,” Gensler says. “But I think the events of those days, we took that risk way down.”</p><p>The SEC’s report on the January 2021 events identified four areas for potential study and further consideration: 1) forces that may cause a brokerage to restrict trading; 2) digital-engagement practices and payment for order flow; 3) trading in dark pools and through wholesalers; 4) short selling and market dynamics.</p><p style=\"text-align: start;\">Ultimately, Gensler issued dozens of rules after his April 2021 confirmation, including disclosures tied to short sales and stock loans.</p><p style=\"text-align: start;\">Many of those rules have been delayed by lawsuits or withdrawn by the Trump administration.</p><p>“Honestly, I think it’s very hard for regulators to address these issues given the current litigation environment,” says Fischer, who now serves as policy director at Better Markets.</p><p style=\"text-align: start;\">Interactive Brokers has suggested a handful of rule changes that Peterffy argues would fix the vulnerabilities in the financial system that the GameStop saga exposed. First is a daily publication of short interest. Another proposal would make the margin required on short selling to increase as the short interest rises. Currently, a short seller must put 150% of the value of a short sale in a margin account, which includes the price of the sale and an additional 50% of the value. Peterffy wants that additional maintenance margin requirement to rise as the short interest increases above 50%</p><p style=\"text-align: start;\">Another rule proposed by Interactive Brokers would limit the ability to open new positions when the short interest hits 100%. As it stands, short interest could theoretically rise to multiples of the shares available for trading, as the same borrowed stock goes from one short seller to the next.</p><p style=\"text-align: start;\">More generally, the 2021 meme craze raised broad questions about fairness in markets.</p><p style=\"text-align: start;\">The SEC faced some calls to ban payment for order flow, the controversial practice where market makers pay brokerages for the right to match buyers and sellers so they can profit on the difference. Payment for order flow underpins commission-free trading, but it has also been described by many, including Gensler, as a conflict of interest.</p><p style=\"text-align: start;\">Gensler says the better option was to lower the cost of the market by reducing the minimum price increment for a stock quote to a half cent from a penny and lower the fees exchanges charge for access to one-tenth of a cent per share from three-tenths.</p><p>“I really thought it was better to lower the cost of the market,” Gensler says. “The half penny versus a penny might not sound like a lot, but that’s 50%. And we lowered access fees by 67%. These things are big.”</p><p style=\"text-align: start;\">A court upheld the tick size and exchange fees rules, but the SEC under Paul Atkins pushed compliance to November 2026. “In light of potential uncertainty created by the litigation, market participants may need additional time to prepare for compliance,” Atkins said in October.</p><p style=\"text-align: start;\">The Trump SEC withdrew 14 rules proposed during the Biden administration, including some related to reforming stock trading, subjecting crypto platforms to stock exchange rules, and the use of predictive analytics and “gamification” by brokerages apps.</p><p style=\"text-align: start;\">“The agenda reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority,” Atkins said in a statement this past year.</p><h2 id=\"id_378299020\" style=\"text-align: start;\">Retail’s Resilience</h2><p style=\"text-align: start;\">One good thing to come out of GameStop was that it got some retail investors more involved in the process, Fischer says. We the Investors, an organization co-founded by Dave Lauer, a longtime advocate for retail investors, has sent more than 10,000 comment letters to the SEC, advocating for things like transparency and fairness in markets, investor choice and control, best execution, as well as better settlement and clearing.</p><p style=\"text-align: start;\">“It really exposed the guts of the market to people that had never paid much attention to it up until then,” says Lauer, who is also the co-founder of Urvin Finance. “Like a lot of things on Wall Street, I think it exposed a lot of unfairness, a lot of rent-seeking and a lot of regulatory capture. And I think those things really resonated.”</p><p>Retail participation has remained a major force in markets, driving big moves in everything from electric vehicles to anything that touches artificial intelligence.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/54e41ddf987adf70ef717f9e0ff4051c\" tg-width=\"968\" tg-height=\"652\"/></p><p>Though some investors stuck around in GameStop and <a href=\"https://laohu8.com/S/AMC\">AMC Entertainment Holdings</a>, other meme traders found new targets. In July, meme stock investors calling themselves the “Open Army” swarmedOpendoor Technologiesand turned activist: They rallied against former CEO Carrie Wheeler and in favor of co-founder Keith Rabois. Wheeler left the company in August, and Rabois joined the firm’s board with co-founder Eric Wu in September. Shares have traded sideways ever since.</p><p style=\"text-align: start;\">Then there’s crypto.</p><p style=\"text-align: start;\">“Everything that happened in GameStop is happening in crypto markets but on steroids,” says Fischer. “As chaotic as GameStop was, it’s even more chaotic and there’s less oversight in the crypto market.”</p><p style=\"text-align: start;\">A resurgence in meme stock chatter this past year led Roundhill Investments to relaunch its <a href=\"https://laohu8.com/S/MEME\">MEME Stock ETF</a>, which first launched in December 2021—right around a short-term peak for the Nasdaq. The tech-heavy index fell 33% in 2022, and the ETF was closed in November 2023.</p><p style=\"text-align: start;\">Roundhill CEO Dave Mazza says this time, the ETF is actively managed and rebalanced at least weekly. The firm is targeting a universe of stocks with high implied volatility and interest among the retail investor community.</p><p>“In today’s meme stock world, it’s really more so about cutting-edge themes,” Mazza says. “It’s more about themes that retail can kind of be the price-setter in.”</p><p style=\"text-align: start;\">Meanwhile, brokerages like Robinhood, Interactive Brokers, and Charles Schwab have been engaged in an arms race to meet customer needs.</p><p style=\"text-align: start;\">“Overall, the customer base is becoming much more sophisticated,” Interactive’s Peterffy says. “People certainly learned a lot about the market. That’s for sure.”</p><p style=\"text-align: start;\">Robinhood says that 90% of the 2.5 million accounts it added in January 2021 are still on the platform.</p><p>The brokerage was up to 26.9 million funded customers in November 2025. Steve Quirk, Robinhood’s chief brokerage officer, tells <em>Barron’s</em> that many of the people who came into Robinhood through meme stocks have grown up a bit getting involved in retirement accounts, high-yield savings accounts, and other less exciting avenues of investing.</p><p style=\"text-align: start;\">“We have kept up with them,” Quirk says. “And it’s sort of their evolution. They were 20-something-year-olds. Now, maybe they’re in their 30s. And they’re sort of progressing along the path that a lot of people take with respect to investing.”</p><p style=\"text-align: start;\">There’s even been a bit of a shift on Reddit, the online platform that birthed the rowdy WallStreetBets forum. A Reddit spokesperson says the personal-finance group has seen a 117% increase in posts and comments from the end of 2020 through 2025. The investment interest group, which is led by rowdier subreddits like WallStreetBets and Superstonk but also includes the stocks and investing forums, has seen a 49% uptick in posts and comments from the end of 2020 through the end of 2025.</p><p style=\"text-align: start;\">Fidelity, among Wall Street’s more conservative firms, is using Reddit to reach users on its own investment forum. “I think that’s a massive difference that you wouldn’t have seen in 2021,” says Rob Gaige, Reddit’s global head of Insights.</p><p style=\"text-align: start;\">Likewise, brands that were once shunned by Reddit users are now being embraced on the platform. “They’re really adding tremendous value, and I think are becoming an essential part of how Reddit works,” Gaige says.</p><h2 id=\"id_5544620\" style=\"text-align: start;\">The More Things Change…</h2><p style=\"text-align: start;\">Despite all the new tools and platforms, the central character in the January 2021 GameStop saga doesn’t think retail investors are in a better spot than five years ago.</p><p style=\"text-align: start;\">“Retail investors have more access, but they don’t have the same advantages as institutional capital,” says Ryan Cohen, who joined GameStop’s board on Jan. 11, 2021, as a private investor, sparking the stock’s furious rally. “They don’t have the size. In many ways, it’s still very similar to the way it was before. But I’d say, generally, incentives are a big part of the problem.”</p><p style=\"text-align: start;\">“There’s more institutional money than ever,” adds Cohen, who became GameStop’s chairman in June 2021 and its CEO two years later. “It’s concentrated in hedge funds, private equity, these gigantic pools of capital. And when you have capital that’s that concentrated, and you’ve got these money managers that are collecting fees—and in most cases, it’s not really tied to much—it distorts prices, and it distorts behavior.”</p><p>The Wall Street titans of the GameStop saga have done well. Melvin Capital, the short seller that retail investors wanted to squeeze the most, shut down a year after GameStop’s peak. But founder Gabe Plotkin has remade himself as a sports executive, leading a group that bought the Charlotte Hornets National Basketball Association team in 2023. He told the Mislaibeled podcast last year that “at the end of the day, life’s pretty good.”</p><p style=\"text-align: start;\">His mentor Steve Cohen also caught plenty of flak from retail investors when Point72 Asset Management joined Ken Griffin’s Citadel to invest $2.75 billion for noncontrolling revenue share in Melvin. Cohen’s $8.1 billion plan with Hard Rock for a casino complex near Citi Field was approved by New York’s gaming commission in December.</p><p style=\"text-align: start;\">For Griffin, CNBC reported that his Citadel hedge fund was set to return $5 billion in profit early this year. The boom in retail trading has also been great for Griffin’s market-making firm, Citadel Securities.</p><h2 id=\"id_2792712193\" style=\"text-align: start;\">GameStop 2.0</h2><p style=\"text-align: start;\">One area where things have changed drastically in the five years since January 2021 are the balance sheets of some of the meme stock companies themselves.</p><p style=\"text-align: start;\">The original meme stocks were targeted by investors in part because they had high short interests. At the time, short sellers were betting big against physical retailers and companies that faced liquidity problems that were exacerbated by pandemic shutdowns.</p><p style=\"text-align: start;\">“What was unique about this meme stock phenomenon, from where we sat as distressed-credit investors, is that there were a lot of companies that had seen their revenue decline materially, or even go to zero, for a period of time due to Covid,” says Jason Mudrick, founder of hedge fund Mudrick Capital Management.</p><p style=\"text-align: start;\">Mudrick Capital was one of the firms that actually made money on the meme stock phenomenon, by lending firms money and buying their debt on the open market for pennies on the dollar.</p><p style=\"text-align: start;\">“They’re both still in existence because they went out and raised a tremendous amount of capital off of a very inflated stock price and utilized the irrational behavior of the mass market, the mass forces there, to capitalize their business and avoid insolvency,” Mudrick says of GameStop and AMC.</p><p style=\"text-align: start;\">Cohen says, “The business would be bankrupt by now, that’s for sure,” if he hadn’t got involved. “It would look like all the other retailers that have gone bankrupt. It’s a long list: J.C. Penney. RadioShack. Circuit City.”</p><p style=\"text-align: start;\">Though GameStop shares pulled back from their late-January peak, the stock has stayed well above where it traded in 2020. The higher prices provided the company an opportunity to sell billions of dollars in stock, which GameStop has used to significantly pay down long-term debt.</p><p style=\"text-align: start;\">“They were one of the smart meme stock companies that took big advantage of the moves and sold a lot of equity,” says Jim Chanos, the famed short seller and founder of Kynikos Associates. “They liquefied their balance sheet and gave themselves a cushion, which was a very, very smart thing to do. A lot of meme stocks and short-squeeze stocks more recently have not done that.”</p><p style=\"text-align: start;\">The company ended the third quarter of 2025 with $8.8 billion in cash, cash equivalents, and marketable securities. It also held $519.4 million in Bitcoin. The company has $4.16 billion in long-term debt. Though AMC is still navigating a massive debt load, the theater chain has so far managed to avoid bankruptcy by issuing stock.</p><h2 id=\"id_3717826442\" style=\"text-align: start;\">Adapt or Die</h2><p style=\"text-align: start;\">While retail investors hunt for the next GameStop, Wall Street managers are trying their best to avoid one.</p><p style=\"text-align: start;\">“It was a humbling experience for a lot of sophisticated financial investors to see such an irrational behavior driving markets so violently,” says Mudrick. “A lot of people lost a lot of money, and some very smart investors got put out of business because of this meme stock phenomenon.”</p><p style=\"text-align: start;\">While long/short funds haven’t stopped shorting, managers are much more aware of the risk of a stock becoming the next GameStop on social media, according to Mudrick. “Everybody’s got a tremendous amount of tools in place to understand that risk,” he says. “And that was not something anybody really focused on.”</p><p style=\"text-align: start;\">One of those tools is VandaTrack. Vanda, the independent research firm that specializes in positioning and flow, began developing its tool to track retail investor activity in 2020. It launched in early 2021, just as Wall Street scrambled to find tools to better understand the meme stock crowd.</p><p style=\"text-align: start;\">Viraj Patel, partner and deputy head of research at Vanda, says institutional investors now keep tabs on retail data for risk management and idea generation. He says the first question clients often have when a short starts squeezing is whether retail is behind it.</p><p style=\"text-align: start;\">“It’s still a pretty new science,” says Patel. “I don’t think anyone has quite solved how to think about, but at the same time, more and more people just cannot afford to not stay on top of it.”</p><p style=\"text-align: start;\">Abnormal retail flows can also act as an early warning system for clients who are invested in frothier parts of the market favored by retail. He says VandaTrack flagged abnormal flows in stocks that surged in early September and early October before pulling back later in the fall.</p><p style=\"text-align: start;\">Sell-side and buy-side trading desks use third-party providers like Vanda to keep tabs on which single stocks have the largest retail following, and how they have been trending over time, says Jeffrey Favuzza, vice president of equities trading at Jefferies. Even just opening X (formerly Twitter) has become a way for traders to suss out unexplained moves, Favuzza says.</p><p style=\"text-align: start;\">When retail investors do pile into a stock, companies now have a game plan. Mudrick says companies, on his advice, have put paperwork in place to quickly issue stock if the meme crowd swoops in. The process can take months to push through, so firms need to plan in advance or risk missing out on the chance to capitalize on a surge.</p><p style=\"text-align: start;\">“We’ve learned from it that this can happen, and these companies should be ready,” Mudrick says. “And I think that’s very common. I think the lawyers are advising their clients that you should do this, so I do think it has changed things in that everybody is now prepared.”</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0963586101.USD":"ALLIANZ GLOBAL SMALL CAP EQUITY \"AT\" ACC","BK4588":"碎股","GME":"游戏驿站","BK4108":"电影和娱乐","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","AMC":"AMC院线","LU2237957902.USD":"NIKKO AM GLOBAL EQUITY \"F\" (USD) ACC","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","BK4598":"佩洛西持仓","LU2237957811.SGD":"NIKKO AM GLOBAL EQUITY \"F\" (SGD) ACC","BK4539":"次新股","MEME":"Roundhill Meme Stock ETF","BK4585":"ETF&股票定投概念","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","BK4076":"电脑与电子产品零售","BK4127":"投资银行业与经纪业","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU0971096721.USD":"富达环球金融服务 A","BK4547":"WSB热门概念","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","BK4577":"网络游戏"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2605435426","content_text":"Five years ago, investors in a videogame retailer teetering toward bankruptcy nearly toppled the global financial system.The so-called GameStop revolution inspired books, countless blogs, TV specials, and even a Hollywood film. But for a short time, financial markets were headed toward a far more dramatic conclusion.“Wall Street would have collapsed,” says Thomas Peterffy, the billionaire founder and chairman of Interactive Brokers. “We were sitting there, really, really shaking in our pants.”Peterffy says brokerages like Interactive Brokers had a lot of customers who purchased GameStop stock on margin at low prices. Those shares were fair game for the brokers to loan out to short sellers, who bet that they could pay back the loan in the future by buying the stock at a lower price.If those margin customers sitting on large paper gains sold a fraction of their shares to pay back their loans, the brokers who lent out the relevant stock would be forced to recall the shares. Short selling in GameStop infamously outnumbered the total number of shares available for trading, so brokers would have needed to rush to the market and “bid it up to infinity,” Peterffy says. The system wouldn’t be able to handle that kind of spiral.“I expected that it would happen,” Peterffy says of such a spiral in the price of GameStop shares. “Of course, I didn’t know that these people didn’t know what the rules were.”In fact, the GameStop investors had a new set of motivations—hold the stock no matter what. That stubborn approach may have protected the system from collapse.Five years later, the mechanisms that would have allowed that spiral are still unpatched, Peterffy says. Though the GameStop saga initially inspired aspirations for big changes on Wall Street, the actual results have been a mixed bag. Regulators scrambled to patch leaks in the financial system; brokers raced to capture a surge in demand from retail customers; the underlying companies capitalized on meme stock traders; and Wall Street, as it often does, found its way back to the top.For many individuals, the GameStop saga permanently changed what it means to invest. Trading volumes from retail investors soared during the meme craze and have remained elevated ever since. Brokerage firms are in an arms race to keep up with this increasingly sophisticated clientele, who have discovered the excitement—and often short-term rewards—of speculation across stocks, cryptocurrencies, sports betting, and, most recently, prediction markets.Plugging Regulatory LeaksShares of GameStop hit a record high—a split-adjusted $120.75 a share on Jan. 28, 2021. It was the same day that brokerages like Robinhood Markets and Interactive Brokers halted purchases of GameStop and other highly shorted stocks. The firms said they were responding to a surge in deposit requirements from the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation, which clears trades.The move killed momentum in meme stocks; retail traders, regulators, executives, and members of Congress have been dealing with the fallout ever since.“Now, it’s a matter of opinion whether or not that trading halt ended up protecting customers or harming customers,” says Amanda Fischer, who served as chief of staff for Gary Gensler, the chair of the Securities and Exchange Commission during the Biden administration. “But I can tell you, a large number of customers were very upset that they didn’t get access to those trades.”The trading halt sparked a wave of congressional hearings and provided the SEC with plenty of ammo to reform markets. Gensler says the halts represented a market failure. “That was really bad.”“You really want to lower the risk of that. Access to the market is a fundamental tenet of good, clean, fair, efficient markets,” he says.Five years later, Gensler says the risk of everyday investors being shut off from their brokerage accounts is “far less likely” following SEC rule changes to improve clearinghouse efficiency under the Biden administration, including the move to T+1, which shortened the time trades take to settle to one day from two days. That said, “it’s not impossible. You get a very big stress event like a brokerage firm failing, a client might be cut off from their account,” Gensler says. “But I think the events of those days, we took that risk way down.”The SEC’s report on the January 2021 events identified four areas for potential study and further consideration: 1) forces that may cause a brokerage to restrict trading; 2) digital-engagement practices and payment for order flow; 3) trading in dark pools and through wholesalers; 4) short selling and market dynamics.Ultimately, Gensler issued dozens of rules after his April 2021 confirmation, including disclosures tied to short sales and stock loans.Many of those rules have been delayed by lawsuits or withdrawn by the Trump administration.“Honestly, I think it’s very hard for regulators to address these issues given the current litigation environment,” says Fischer, who now serves as policy director at Better Markets.Interactive Brokers has suggested a handful of rule changes that Peterffy argues would fix the vulnerabilities in the financial system that the GameStop saga exposed. First is a daily publication of short interest. Another proposal would make the margin required on short selling to increase as the short interest rises. Currently, a short seller must put 150% of the value of a short sale in a margin account, which includes the price of the sale and an additional 50% of the value. Peterffy wants that additional maintenance margin requirement to rise as the short interest increases above 50%Another rule proposed by Interactive Brokers would limit the ability to open new positions when the short interest hits 100%. As it stands, short interest could theoretically rise to multiples of the shares available for trading, as the same borrowed stock goes from one short seller to the next.More generally, the 2021 meme craze raised broad questions about fairness in markets.The SEC faced some calls to ban payment for order flow, the controversial practice where market makers pay brokerages for the right to match buyers and sellers so they can profit on the difference. Payment for order flow underpins commission-free trading, but it has also been described by many, including Gensler, as a conflict of interest.Gensler says the better option was to lower the cost of the market by reducing the minimum price increment for a stock quote to a half cent from a penny and lower the fees exchanges charge for access to one-tenth of a cent per share from three-tenths.“I really thought it was better to lower the cost of the market,” Gensler says. “The half penny versus a penny might not sound like a lot, but that’s 50%. And we lowered access fees by 67%. These things are big.”A court upheld the tick size and exchange fees rules, but the SEC under Paul Atkins pushed compliance to November 2026. “In light of potential uncertainty created by the litigation, market participants may need additional time to prepare for compliance,” Atkins said in October.The Trump SEC withdrew 14 rules proposed during the Biden administration, including some related to reforming stock trading, subjecting crypto platforms to stock exchange rules, and the use of predictive analytics and “gamification” by brokerages apps.“The agenda reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority,” Atkins said in a statement this past year.Retail’s ResilienceOne good thing to come out of GameStop was that it got some retail investors more involved in the process, Fischer says. We the Investors, an organization co-founded by Dave Lauer, a longtime advocate for retail investors, has sent more than 10,000 comment letters to the SEC, advocating for things like transparency and fairness in markets, investor choice and control, best execution, as well as better settlement and clearing.“It really exposed the guts of the market to people that had never paid much attention to it up until then,” says Lauer, who is also the co-founder of Urvin Finance. “Like a lot of things on Wall Street, I think it exposed a lot of unfairness, a lot of rent-seeking and a lot of regulatory capture. And I think those things really resonated.”Retail participation has remained a major force in markets, driving big moves in everything from electric vehicles to anything that touches artificial intelligence.Though some investors stuck around in GameStop and AMC Entertainment Holdings, other meme traders found new targets. In July, meme stock investors calling themselves the “Open Army” swarmedOpendoor Technologiesand turned activist: They rallied against former CEO Carrie Wheeler and in favor of co-founder Keith Rabois. Wheeler left the company in August, and Rabois joined the firm’s board with co-founder Eric Wu in September. Shares have traded sideways ever since.Then there’s crypto.“Everything that happened in GameStop is happening in crypto markets but on steroids,” says Fischer. “As chaotic as GameStop was, it’s even more chaotic and there’s less oversight in the crypto market.”A resurgence in meme stock chatter this past year led Roundhill Investments to relaunch its MEME Stock ETF, which first launched in December 2021—right around a short-term peak for the Nasdaq. The tech-heavy index fell 33% in 2022, and the ETF was closed in November 2023.Roundhill CEO Dave Mazza says this time, the ETF is actively managed and rebalanced at least weekly. The firm is targeting a universe of stocks with high implied volatility and interest among the retail investor community.“In today’s meme stock world, it’s really more so about cutting-edge themes,” Mazza says. “It’s more about themes that retail can kind of be the price-setter in.”Meanwhile, brokerages like Robinhood, Interactive Brokers, and Charles Schwab have been engaged in an arms race to meet customer needs.“Overall, the customer base is becoming much more sophisticated,” Interactive’s Peterffy says. “People certainly learned a lot about the market. That’s for sure.”Robinhood says that 90% of the 2.5 million accounts it added in January 2021 are still on the platform.The brokerage was up to 26.9 million funded customers in November 2025. Steve Quirk, Robinhood’s chief brokerage officer, tells Barron’s that many of the people who came into Robinhood through meme stocks have grown up a bit getting involved in retirement accounts, high-yield savings accounts, and other less exciting avenues of investing.“We have kept up with them,” Quirk says. “And it’s sort of their evolution. They were 20-something-year-olds. Now, maybe they’re in their 30s. And they’re sort of progressing along the path that a lot of people take with respect to investing.”There’s even been a bit of a shift on Reddit, the online platform that birthed the rowdy WallStreetBets forum. A Reddit spokesperson says the personal-finance group has seen a 117% increase in posts and comments from the end of 2020 through 2025. The investment interest group, which is led by rowdier subreddits like WallStreetBets and Superstonk but also includes the stocks and investing forums, has seen a 49% uptick in posts and comments from the end of 2020 through the end of 2025.Fidelity, among Wall Street’s more conservative firms, is using Reddit to reach users on its own investment forum. “I think that’s a massive difference that you wouldn’t have seen in 2021,” says Rob Gaige, Reddit’s global head of Insights.Likewise, brands that were once shunned by Reddit users are now being embraced on the platform. “They’re really adding tremendous value, and I think are becoming an essential part of how Reddit works,” Gaige says.The More Things Change…Despite all the new tools and platforms, the central character in the January 2021 GameStop saga doesn’t think retail investors are in a better spot than five years ago.“Retail investors have more access, but they don’t have the same advantages as institutional capital,” says Ryan Cohen, who joined GameStop’s board on Jan. 11, 2021, as a private investor, sparking the stock’s furious rally. “They don’t have the size. In many ways, it’s still very similar to the way it was before. But I’d say, generally, incentives are a big part of the problem.”“There’s more institutional money than ever,” adds Cohen, who became GameStop’s chairman in June 2021 and its CEO two years later. “It’s concentrated in hedge funds, private equity, these gigantic pools of capital. And when you have capital that’s that concentrated, and you’ve got these money managers that are collecting fees—and in most cases, it’s not really tied to much—it distorts prices, and it distorts behavior.”The Wall Street titans of the GameStop saga have done well. Melvin Capital, the short seller that retail investors wanted to squeeze the most, shut down a year after GameStop’s peak. But founder Gabe Plotkin has remade himself as a sports executive, leading a group that bought the Charlotte Hornets National Basketball Association team in 2023. He told the Mislaibeled podcast last year that “at the end of the day, life’s pretty good.”His mentor Steve Cohen also caught plenty of flak from retail investors when Point72 Asset Management joined Ken Griffin’s Citadel to invest $2.75 billion for noncontrolling revenue share in Melvin. Cohen’s $8.1 billion plan with Hard Rock for a casino complex near Citi Field was approved by New York’s gaming commission in December.For Griffin, CNBC reported that his Citadel hedge fund was set to return $5 billion in profit early this year. The boom in retail trading has also been great for Griffin’s market-making firm, Citadel Securities.GameStop 2.0One area where things have changed drastically in the five years since January 2021 are the balance sheets of some of the meme stock companies themselves.The original meme stocks were targeted by investors in part because they had high short interests. At the time, short sellers were betting big against physical retailers and companies that faced liquidity problems that were exacerbated by pandemic shutdowns.“What was unique about this meme stock phenomenon, from where we sat as distressed-credit investors, is that there were a lot of companies that had seen their revenue decline materially, or even go to zero, for a period of time due to Covid,” says Jason Mudrick, founder of hedge fund Mudrick Capital Management.Mudrick Capital was one of the firms that actually made money on the meme stock phenomenon, by lending firms money and buying their debt on the open market for pennies on the dollar.“They’re both still in existence because they went out and raised a tremendous amount of capital off of a very inflated stock price and utilized the irrational behavior of the mass market, the mass forces there, to capitalize their business and avoid insolvency,” Mudrick says of GameStop and AMC.Cohen says, “The business would be bankrupt by now, that’s for sure,” if he hadn’t got involved. “It would look like all the other retailers that have gone bankrupt. It’s a long list: J.C. Penney. RadioShack. Circuit City.”Though GameStop shares pulled back from their late-January peak, the stock has stayed well above where it traded in 2020. The higher prices provided the company an opportunity to sell billions of dollars in stock, which GameStop has used to significantly pay down long-term debt.“They were one of the smart meme stock companies that took big advantage of the moves and sold a lot of equity,” says Jim Chanos, the famed short seller and founder of Kynikos Associates. “They liquefied their balance sheet and gave themselves a cushion, which was a very, very smart thing to do. A lot of meme stocks and short-squeeze stocks more recently have not done that.”The company ended the third quarter of 2025 with $8.8 billion in cash, cash equivalents, and marketable securities. It also held $519.4 million in Bitcoin. The company has $4.16 billion in long-term debt. Though AMC is still navigating a massive debt load, the theater chain has so far managed to avoid bankruptcy by issuing stock.Adapt or DieWhile retail investors hunt for the next GameStop, Wall Street managers are trying their best to avoid one.“It was a humbling experience for a lot of sophisticated financial investors to see such an irrational behavior driving markets so violently,” says Mudrick. “A lot of people lost a lot of money, and some very smart investors got put out of business because of this meme stock phenomenon.”While long/short funds haven’t stopped shorting, managers are much more aware of the risk of a stock becoming the next GameStop on social media, according to Mudrick. “Everybody’s got a tremendous amount of tools in place to understand that risk,” he says. “And that was not something anybody really focused on.”One of those tools is VandaTrack. Vanda, the independent research firm that specializes in positioning and flow, began developing its tool to track retail investor activity in 2020. It launched in early 2021, just as Wall Street scrambled to find tools to better understand the meme stock crowd.Viraj Patel, partner and deputy head of research at Vanda, says institutional investors now keep tabs on retail data for risk management and idea generation. He says the first question clients often have when a short starts squeezing is whether retail is behind it.“It’s still a pretty new science,” says Patel. “I don’t think anyone has quite solved how to think about, but at the same time, more and more people just cannot afford to not stay on top of it.”Abnormal retail flows can also act as an early warning system for clients who are invested in frothier parts of the market favored by retail. He says VandaTrack flagged abnormal flows in stocks that surged in early September and early October before pulling back later in the fall.Sell-side and buy-side trading desks use third-party providers like Vanda to keep tabs on which single stocks have the largest retail following, and how they have been trending over time, says Jeffrey Favuzza, vice president of equities trading at Jefferies. Even just opening X (formerly Twitter) has become a way for traders to suss out unexplained moves, Favuzza says.When retail investors do pile into a stock, companies now have a game plan. Mudrick says companies, on his advice, have put paperwork in place to quickly issue stock if the meme crowd swoops in. The process can take months to push through, so firms need to plan in advance or risk missing out on the chance to capitalize on a surge.“We’ve learned from it that this can happen, and these companies should be ready,” Mudrick says. “And I think that’s very common. I think the lawyers are advising their clients that you should do this, so I do think it has changed things in that everybody is now prepared.”","news_type":1,"symbols_score_info":{"MEME":1.86,"AMC":2,"GME":1.97}},"isVote":1,"tweetType":1,"viewCount":24,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":524882969109128,"gmtCreate":1769171270167,"gmtModify":1769172504959,"author":{"id":"3570265949229284","authorId":"3570265949229284","name":"JOJG","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":11,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3570265949229284","idStr":"3570265949229284"},"themes":[],"title":"","htmlText":"A","listText":"A","text":"A","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/524882969109128","repostId":"2605435426","repostType":2,"repost":{"id":"2605435426","kind":"highlight","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"media_name":"Dow Jones","id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1769149500,"share":"https://ttm.financial/m/news/2605435426?lang=en_US&edition=fundamental","pubTime":"2026-01-23 14:25","market":"us","language":"en","title":"Meme Stocks Turn 5. Will There Ever Be Another GameStop?","url":"https://stock-news.laohu8.com/highlight/detail?id=2605435426","media":"Dow Jones","summary":"Five years after GameStop shareholders launched a revolt, Wall Street has adapted and may have won the war.","content":"<html><head></head><body><p style=\"text-align: start;\">Five years ago, investors in a videogame retailer teetering toward bankruptcy nearly toppled the global financial system.</p><p>The so-called GameStop revolution inspired books, countless blogs, TV specials, and even a Hollywood film. But for a short time, financial markets were headed toward a far more dramatic conclusion.</p><p>“Wall Street would have collapsed,” says Thomas Peterffy, the billionaire founder and chairman of Interactive Brokers. “We were sitting there, really, really shaking in our pants.”</p><p style=\"text-align: start;\">Peterffy says brokerages like <a href=\"https://laohu8.com/S/IBRK\">Interactive Brokers</a> had a lot of customers who purchased <a href=\"https://laohu8.com/S/GME\">GameStop</a> stock on margin at low prices. Those shares were fair game for the brokers to loan out to short sellers, who bet that they could pay back the loan in the future by buying the stock at a lower price.</p><p style=\"text-align: start;\">If those margin customers sitting on large paper gains sold a fraction of their shares to pay back their loans, the brokers who lent out the relevant stock would be forced to recall the shares. Short selling in GameStop infamously outnumbered the total number of shares available for trading, so brokers would have needed to rush to the market and “bid it up to infinity,” Peterffy says. The system wouldn’t be able to handle that kind of spiral.</p><p style=\"text-align: start;\">“I expected that it would happen,” Peterffy says of such a spiral in the price of GameStop shares. “Of course, I didn’t know that these people didn’t know what the rules were.”</p><p>In fact, the GameStop investors had a new set of motivations—hold the stock no matter what. That stubborn approach may have protected the system from collapse.</p><p style=\"text-align: start;\">Five years later, the mechanisms that would have allowed that spiral are still unpatched, Peterffy says. Though the GameStop saga initially inspired aspirations for big changes on Wall Street, the actual results have been a mixed bag. Regulators scrambled to patch leaks in the financial system; brokers raced to capture a surge in demand from retail customers; the underlying companies capitalized on meme stock traders; and Wall Street, as it often does, found its way back to the top.</p><p style=\"text-align: start;\">For many individuals, the GameStop saga permanently changed what it means to invest. Trading volumes from retail investors soared during the meme craze and have remained elevated ever since. Brokerage firms are in an arms race to keep up with this increasingly sophisticated clientele, who have discovered the excitement—and often short-term rewards—of speculation across stocks, cryptocurrencies, sports betting, and, most recently, prediction markets.</p><h2 id=\"id_3787259194\" style=\"text-align: start;\">Plugging Regulatory Leaks</h2><p style=\"text-align: start;\">Shares of GameStop hit a record high—a split-adjusted $120.75 a share on Jan. 28, 2021. It was the same day that brokerages like <a href=\"https://laohu8.com/S/HOOD\">Robinhood Markets</a> and Interactive Brokers halted purchases of GameStop and other highly shorted stocks. The firms said they were responding to a surge in deposit requirements from the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation, which clears trades.</p><p style=\"text-align: start;\">The move killed momentum in meme stocks; retail traders, regulators, executives, and members of Congress have been dealing with the fallout ever since.</p><p style=\"text-align: start;\">“Now, it’s a matter of opinion whether or not that trading halt ended up protecting customers or harming customers,” says Amanda Fischer, who served as chief of staff for Gary Gensler, the chair of the Securities and Exchange Commission during the Biden administration. “But I can tell you, a large number of customers were very upset that they didn’t get access to those trades.”</p><p>The trading halt sparked a wave of congressional hearings and provided the SEC with plenty of ammo to reform markets. Gensler says the halts represented a market failure. “That was really bad.”</p><p style=\"text-align: start;\">“You really want to lower the risk of that. Access to the market is a fundamental tenet of good, clean, fair, efficient markets,” he says.</p><p style=\"text-align: start;\">Five years later, Gensler says the risk of everyday investors being shut off from their brokerage accounts is “far less likely” following SEC rule changes to improve clearinghouse efficiency under the Biden administration, including the move to T+1, which shortened the time trades take to settle to one day from two days. That said, “it’s not impossible. You get a very big stress event like a brokerage firm failing, a client might be cut off from their account,” Gensler says. “But I think the events of those days, we took that risk way down.”</p><p>The SEC’s report on the January 2021 events identified four areas for potential study and further consideration: 1) forces that may cause a brokerage to restrict trading; 2) digital-engagement practices and payment for order flow; 3) trading in dark pools and through wholesalers; 4) short selling and market dynamics.</p><p style=\"text-align: start;\">Ultimately, Gensler issued dozens of rules after his April 2021 confirmation, including disclosures tied to short sales and stock loans.</p><p style=\"text-align: start;\">Many of those rules have been delayed by lawsuits or withdrawn by the Trump administration.</p><p>“Honestly, I think it’s very hard for regulators to address these issues given the current litigation environment,” says Fischer, who now serves as policy director at Better Markets.</p><p style=\"text-align: start;\">Interactive Brokers has suggested a handful of rule changes that Peterffy argues would fix the vulnerabilities in the financial system that the GameStop saga exposed. First is a daily publication of short interest. Another proposal would make the margin required on short selling to increase as the short interest rises. Currently, a short seller must put 150% of the value of a short sale in a margin account, which includes the price of the sale and an additional 50% of the value. Peterffy wants that additional maintenance margin requirement to rise as the short interest increases above 50%</p><p style=\"text-align: start;\">Another rule proposed by Interactive Brokers would limit the ability to open new positions when the short interest hits 100%. As it stands, short interest could theoretically rise to multiples of the shares available for trading, as the same borrowed stock goes from one short seller to the next.</p><p style=\"text-align: start;\">More generally, the 2021 meme craze raised broad questions about fairness in markets.</p><p style=\"text-align: start;\">The SEC faced some calls to ban payment for order flow, the controversial practice where market makers pay brokerages for the right to match buyers and sellers so they can profit on the difference. Payment for order flow underpins commission-free trading, but it has also been described by many, including Gensler, as a conflict of interest.</p><p style=\"text-align: start;\">Gensler says the better option was to lower the cost of the market by reducing the minimum price increment for a stock quote to a half cent from a penny and lower the fees exchanges charge for access to one-tenth of a cent per share from three-tenths.</p><p>“I really thought it was better to lower the cost of the market,” Gensler says. “The half penny versus a penny might not sound like a lot, but that’s 50%. And we lowered access fees by 67%. These things are big.”</p><p style=\"text-align: start;\">A court upheld the tick size and exchange fees rules, but the SEC under Paul Atkins pushed compliance to November 2026. “In light of potential uncertainty created by the litigation, market participants may need additional time to prepare for compliance,” Atkins said in October.</p><p style=\"text-align: start;\">The Trump SEC withdrew 14 rules proposed during the Biden administration, including some related to reforming stock trading, subjecting crypto platforms to stock exchange rules, and the use of predictive analytics and “gamification” by brokerages apps.</p><p style=\"text-align: start;\">“The agenda reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority,” Atkins said in a statement this past year.</p><h2 id=\"id_378299020\" style=\"text-align: start;\">Retail’s Resilience</h2><p style=\"text-align: start;\">One good thing to come out of GameStop was that it got some retail investors more involved in the process, Fischer says. We the Investors, an organization co-founded by Dave Lauer, a longtime advocate for retail investors, has sent more than 10,000 comment letters to the SEC, advocating for things like transparency and fairness in markets, investor choice and control, best execution, as well as better settlement and clearing.</p><p style=\"text-align: start;\">“It really exposed the guts of the market to people that had never paid much attention to it up until then,” says Lauer, who is also the co-founder of Urvin Finance. “Like a lot of things on Wall Street, I think it exposed a lot of unfairness, a lot of rent-seeking and a lot of regulatory capture. And I think those things really resonated.”</p><p>Retail participation has remained a major force in markets, driving big moves in everything from electric vehicles to anything that touches artificial intelligence.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/54e41ddf987adf70ef717f9e0ff4051c\" tg-width=\"968\" tg-height=\"652\"/></p><p>Though some investors stuck around in GameStop and <a href=\"https://laohu8.com/S/AMC\">AMC Entertainment Holdings</a>, other meme traders found new targets. In July, meme stock investors calling themselves the “Open Army” swarmedOpendoor Technologiesand turned activist: They rallied against former CEO Carrie Wheeler and in favor of co-founder Keith Rabois. Wheeler left the company in August, and Rabois joined the firm’s board with co-founder Eric Wu in September. Shares have traded sideways ever since.</p><p style=\"text-align: start;\">Then there’s crypto.</p><p style=\"text-align: start;\">“Everything that happened in GameStop is happening in crypto markets but on steroids,” says Fischer. “As chaotic as GameStop was, it’s even more chaotic and there’s less oversight in the crypto market.”</p><p style=\"text-align: start;\">A resurgence in meme stock chatter this past year led Roundhill Investments to relaunch its <a href=\"https://laohu8.com/S/MEME\">MEME Stock ETF</a>, which first launched in December 2021—right around a short-term peak for the Nasdaq. The tech-heavy index fell 33% in 2022, and the ETF was closed in November 2023.</p><p style=\"text-align: start;\">Roundhill CEO Dave Mazza says this time, the ETF is actively managed and rebalanced at least weekly. The firm is targeting a universe of stocks with high implied volatility and interest among the retail investor community.</p><p>“In today’s meme stock world, it’s really more so about cutting-edge themes,” Mazza says. “It’s more about themes that retail can kind of be the price-setter in.”</p><p style=\"text-align: start;\">Meanwhile, brokerages like Robinhood, Interactive Brokers, and Charles Schwab have been engaged in an arms race to meet customer needs.</p><p style=\"text-align: start;\">“Overall, the customer base is becoming much more sophisticated,” Interactive’s Peterffy says. “People certainly learned a lot about the market. That’s for sure.”</p><p style=\"text-align: start;\">Robinhood says that 90% of the 2.5 million accounts it added in January 2021 are still on the platform.</p><p>The brokerage was up to 26.9 million funded customers in November 2025. Steve Quirk, Robinhood’s chief brokerage officer, tells <em>Barron’s</em> that many of the people who came into Robinhood through meme stocks have grown up a bit getting involved in retirement accounts, high-yield savings accounts, and other less exciting avenues of investing.</p><p style=\"text-align: start;\">“We have kept up with them,” Quirk says. “And it’s sort of their evolution. They were 20-something-year-olds. Now, maybe they’re in their 30s. And they’re sort of progressing along the path that a lot of people take with respect to investing.”</p><p style=\"text-align: start;\">There’s even been a bit of a shift on Reddit, the online platform that birthed the rowdy WallStreetBets forum. A Reddit spokesperson says the personal-finance group has seen a 117% increase in posts and comments from the end of 2020 through 2025. The investment interest group, which is led by rowdier subreddits like WallStreetBets and Superstonk but also includes the stocks and investing forums, has seen a 49% uptick in posts and comments from the end of 2020 through the end of 2025.</p><p style=\"text-align: start;\">Fidelity, among Wall Street’s more conservative firms, is using Reddit to reach users on its own investment forum. “I think that’s a massive difference that you wouldn’t have seen in 2021,” says Rob Gaige, Reddit’s global head of Insights.</p><p style=\"text-align: start;\">Likewise, brands that were once shunned by Reddit users are now being embraced on the platform. “They’re really adding tremendous value, and I think are becoming an essential part of how Reddit works,” Gaige says.</p><h2 id=\"id_5544620\" style=\"text-align: start;\">The More Things Change…</h2><p style=\"text-align: start;\">Despite all the new tools and platforms, the central character in the January 2021 GameStop saga doesn’t think retail investors are in a better spot than five years ago.</p><p style=\"text-align: start;\">“Retail investors have more access, but they don’t have the same advantages as institutional capital,” says Ryan Cohen, who joined GameStop’s board on Jan. 11, 2021, as a private investor, sparking the stock’s furious rally. “They don’t have the size. In many ways, it’s still very similar to the way it was before. But I’d say, generally, incentives are a big part of the problem.”</p><p style=\"text-align: start;\">“There’s more institutional money than ever,” adds Cohen, who became GameStop’s chairman in June 2021 and its CEO two years later. “It’s concentrated in hedge funds, private equity, these gigantic pools of capital. And when you have capital that’s that concentrated, and you’ve got these money managers that are collecting fees—and in most cases, it’s not really tied to much—it distorts prices, and it distorts behavior.”</p><p>The Wall Street titans of the GameStop saga have done well. Melvin Capital, the short seller that retail investors wanted to squeeze the most, shut down a year after GameStop’s peak. But founder Gabe Plotkin has remade himself as a sports executive, leading a group that bought the Charlotte Hornets National Basketball Association team in 2023. He told the Mislaibeled podcast last year that “at the end of the day, life’s pretty good.”</p><p style=\"text-align: start;\">His mentor Steve Cohen also caught plenty of flak from retail investors when Point72 Asset Management joined Ken Griffin’s Citadel to invest $2.75 billion for noncontrolling revenue share in Melvin. Cohen’s $8.1 billion plan with Hard Rock for a casino complex near Citi Field was approved by New York’s gaming commission in December.</p><p style=\"text-align: start;\">For Griffin, CNBC reported that his Citadel hedge fund was set to return $5 billion in profit early this year. The boom in retail trading has also been great for Griffin’s market-making firm, Citadel Securities.</p><h2 id=\"id_2792712193\" style=\"text-align: start;\">GameStop 2.0</h2><p style=\"text-align: start;\">One area where things have changed drastically in the five years since January 2021 are the balance sheets of some of the meme stock companies themselves.</p><p style=\"text-align: start;\">The original meme stocks were targeted by investors in part because they had high short interests. At the time, short sellers were betting big against physical retailers and companies that faced liquidity problems that were exacerbated by pandemic shutdowns.</p><p style=\"text-align: start;\">“What was unique about this meme stock phenomenon, from where we sat as distressed-credit investors, is that there were a lot of companies that had seen their revenue decline materially, or even go to zero, for a period of time due to Covid,” says Jason Mudrick, founder of hedge fund Mudrick Capital Management.</p><p style=\"text-align: start;\">Mudrick Capital was one of the firms that actually made money on the meme stock phenomenon, by lending firms money and buying their debt on the open market for pennies on the dollar.</p><p style=\"text-align: start;\">“They’re both still in existence because they went out and raised a tremendous amount of capital off of a very inflated stock price and utilized the irrational behavior of the mass market, the mass forces there, to capitalize their business and avoid insolvency,” Mudrick says of GameStop and AMC.</p><p style=\"text-align: start;\">Cohen says, “The business would be bankrupt by now, that’s for sure,” if he hadn’t got involved. “It would look like all the other retailers that have gone bankrupt. It’s a long list: J.C. Penney. RadioShack. Circuit City.”</p><p style=\"text-align: start;\">Though GameStop shares pulled back from their late-January peak, the stock has stayed well above where it traded in 2020. The higher prices provided the company an opportunity to sell billions of dollars in stock, which GameStop has used to significantly pay down long-term debt.</p><p style=\"text-align: start;\">“They were one of the smart meme stock companies that took big advantage of the moves and sold a lot of equity,” says Jim Chanos, the famed short seller and founder of Kynikos Associates. “They liquefied their balance sheet and gave themselves a cushion, which was a very, very smart thing to do. A lot of meme stocks and short-squeeze stocks more recently have not done that.”</p><p style=\"text-align: start;\">The company ended the third quarter of 2025 with $8.8 billion in cash, cash equivalents, and marketable securities. It also held $519.4 million in Bitcoin. The company has $4.16 billion in long-term debt. Though AMC is still navigating a massive debt load, the theater chain has so far managed to avoid bankruptcy by issuing stock.</p><h2 id=\"id_3717826442\" style=\"text-align: start;\">Adapt or Die</h2><p style=\"text-align: start;\">While retail investors hunt for the next GameStop, Wall Street managers are trying their best to avoid one.</p><p style=\"text-align: start;\">“It was a humbling experience for a lot of sophisticated financial investors to see such an irrational behavior driving markets so violently,” says Mudrick. “A lot of people lost a lot of money, and some very smart investors got put out of business because of this meme stock phenomenon.”</p><p style=\"text-align: start;\">While long/short funds haven’t stopped shorting, managers are much more aware of the risk of a stock becoming the next GameStop on social media, according to Mudrick. “Everybody’s got a tremendous amount of tools in place to understand that risk,” he says. “And that was not something anybody really focused on.”</p><p style=\"text-align: start;\">One of those tools is VandaTrack. Vanda, the independent research firm that specializes in positioning and flow, began developing its tool to track retail investor activity in 2020. It launched in early 2021, just as Wall Street scrambled to find tools to better understand the meme stock crowd.</p><p style=\"text-align: start;\">Viraj Patel, partner and deputy head of research at Vanda, says institutional investors now keep tabs on retail data for risk management and idea generation. He says the first question clients often have when a short starts squeezing is whether retail is behind it.</p><p style=\"text-align: start;\">“It’s still a pretty new science,” says Patel. “I don’t think anyone has quite solved how to think about, but at the same time, more and more people just cannot afford to not stay on top of it.”</p><p style=\"text-align: start;\">Abnormal retail flows can also act as an early warning system for clients who are invested in frothier parts of the market favored by retail. He says VandaTrack flagged abnormal flows in stocks that surged in early September and early October before pulling back later in the fall.</p><p style=\"text-align: start;\">Sell-side and buy-side trading desks use third-party providers like Vanda to keep tabs on which single stocks have the largest retail following, and how they have been trending over time, says Jeffrey Favuzza, vice president of equities trading at Jefferies. Even just opening X (formerly Twitter) has become a way for traders to suss out unexplained moves, Favuzza says.</p><p style=\"text-align: start;\">When retail investors do pile into a stock, companies now have a game plan. Mudrick says companies, on his advice, have put paperwork in place to quickly issue stock if the meme crowd swoops in. The process can take months to push through, so firms need to plan in advance or risk missing out on the chance to capitalize on a surge.</p><p style=\"text-align: start;\">“We’ve learned from it that this can happen, and these companies should be ready,” Mudrick says. “And I think that’s very common. I think the lawyers are advising their clients that you should do this, so I do think it has changed things in that everybody is now prepared.”</p></body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Meme Stocks Turn 5. Will There Ever Be Another GameStop?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMeme Stocks Turn 5. Will There Ever Be Another GameStop?\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Dow Jones </p>\n<p class=\"h-time\">2026-01-23 14:25</p>\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body><p style=\"text-align: start;\">Five years ago, investors in a videogame retailer teetering toward bankruptcy nearly toppled the global financial system.</p><p>The so-called GameStop revolution inspired books, countless blogs, TV specials, and even a Hollywood film. But for a short time, financial markets were headed toward a far more dramatic conclusion.</p><p>“Wall Street would have collapsed,” says Thomas Peterffy, the billionaire founder and chairman of Interactive Brokers. “We were sitting there, really, really shaking in our pants.”</p><p style=\"text-align: start;\">Peterffy says brokerages like <a href=\"https://laohu8.com/S/IBRK\">Interactive Brokers</a> had a lot of customers who purchased <a href=\"https://laohu8.com/S/GME\">GameStop</a> stock on margin at low prices. Those shares were fair game for the brokers to loan out to short sellers, who bet that they could pay back the loan in the future by buying the stock at a lower price.</p><p style=\"text-align: start;\">If those margin customers sitting on large paper gains sold a fraction of their shares to pay back their loans, the brokers who lent out the relevant stock would be forced to recall the shares. Short selling in GameStop infamously outnumbered the total number of shares available for trading, so brokers would have needed to rush to the market and “bid it up to infinity,” Peterffy says. The system wouldn’t be able to handle that kind of spiral.</p><p style=\"text-align: start;\">“I expected that it would happen,” Peterffy says of such a spiral in the price of GameStop shares. “Of course, I didn’t know that these people didn’t know what the rules were.”</p><p>In fact, the GameStop investors had a new set of motivations—hold the stock no matter what. That stubborn approach may have protected the system from collapse.</p><p style=\"text-align: start;\">Five years later, the mechanisms that would have allowed that spiral are still unpatched, Peterffy says. Though the GameStop saga initially inspired aspirations for big changes on Wall Street, the actual results have been a mixed bag. Regulators scrambled to patch leaks in the financial system; brokers raced to capture a surge in demand from retail customers; the underlying companies capitalized on meme stock traders; and Wall Street, as it often does, found its way back to the top.</p><p style=\"text-align: start;\">For many individuals, the GameStop saga permanently changed what it means to invest. Trading volumes from retail investors soared during the meme craze and have remained elevated ever since. Brokerage firms are in an arms race to keep up with this increasingly sophisticated clientele, who have discovered the excitement—and often short-term rewards—of speculation across stocks, cryptocurrencies, sports betting, and, most recently, prediction markets.</p><h2 id=\"id_3787259194\" style=\"text-align: start;\">Plugging Regulatory Leaks</h2><p style=\"text-align: start;\">Shares of GameStop hit a record high—a split-adjusted $120.75 a share on Jan. 28, 2021. It was the same day that brokerages like <a href=\"https://laohu8.com/S/HOOD\">Robinhood Markets</a> and Interactive Brokers halted purchases of GameStop and other highly shorted stocks. The firms said they were responding to a surge in deposit requirements from the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation, which clears trades.</p><p style=\"text-align: start;\">The move killed momentum in meme stocks; retail traders, regulators, executives, and members of Congress have been dealing with the fallout ever since.</p><p style=\"text-align: start;\">“Now, it’s a matter of opinion whether or not that trading halt ended up protecting customers or harming customers,” says Amanda Fischer, who served as chief of staff for Gary Gensler, the chair of the Securities and Exchange Commission during the Biden administration. “But I can tell you, a large number of customers were very upset that they didn’t get access to those trades.”</p><p>The trading halt sparked a wave of congressional hearings and provided the SEC with plenty of ammo to reform markets. Gensler says the halts represented a market failure. “That was really bad.”</p><p style=\"text-align: start;\">“You really want to lower the risk of that. Access to the market is a fundamental tenet of good, clean, fair, efficient markets,” he says.</p><p style=\"text-align: start;\">Five years later, Gensler says the risk of everyday investors being shut off from their brokerage accounts is “far less likely” following SEC rule changes to improve clearinghouse efficiency under the Biden administration, including the move to T+1, which shortened the time trades take to settle to one day from two days. That said, “it’s not impossible. You get a very big stress event like a brokerage firm failing, a client might be cut off from their account,” Gensler says. “But I think the events of those days, we took that risk way down.”</p><p>The SEC’s report on the January 2021 events identified four areas for potential study and further consideration: 1) forces that may cause a brokerage to restrict trading; 2) digital-engagement practices and payment for order flow; 3) trading in dark pools and through wholesalers; 4) short selling and market dynamics.</p><p style=\"text-align: start;\">Ultimately, Gensler issued dozens of rules after his April 2021 confirmation, including disclosures tied to short sales and stock loans.</p><p style=\"text-align: start;\">Many of those rules have been delayed by lawsuits or withdrawn by the Trump administration.</p><p>“Honestly, I think it’s very hard for regulators to address these issues given the current litigation environment,” says Fischer, who now serves as policy director at Better Markets.</p><p style=\"text-align: start;\">Interactive Brokers has suggested a handful of rule changes that Peterffy argues would fix the vulnerabilities in the financial system that the GameStop saga exposed. First is a daily publication of short interest. Another proposal would make the margin required on short selling to increase as the short interest rises. Currently, a short seller must put 150% of the value of a short sale in a margin account, which includes the price of the sale and an additional 50% of the value. Peterffy wants that additional maintenance margin requirement to rise as the short interest increases above 50%</p><p style=\"text-align: start;\">Another rule proposed by Interactive Brokers would limit the ability to open new positions when the short interest hits 100%. As it stands, short interest could theoretically rise to multiples of the shares available for trading, as the same borrowed stock goes from one short seller to the next.</p><p style=\"text-align: start;\">More generally, the 2021 meme craze raised broad questions about fairness in markets.</p><p style=\"text-align: start;\">The SEC faced some calls to ban payment for order flow, the controversial practice where market makers pay brokerages for the right to match buyers and sellers so they can profit on the difference. Payment for order flow underpins commission-free trading, but it has also been described by many, including Gensler, as a conflict of interest.</p><p style=\"text-align: start;\">Gensler says the better option was to lower the cost of the market by reducing the minimum price increment for a stock quote to a half cent from a penny and lower the fees exchanges charge for access to one-tenth of a cent per share from three-tenths.</p><p>“I really thought it was better to lower the cost of the market,” Gensler says. “The half penny versus a penny might not sound like a lot, but that’s 50%. And we lowered access fees by 67%. These things are big.”</p><p style=\"text-align: start;\">A court upheld the tick size and exchange fees rules, but the SEC under Paul Atkins pushed compliance to November 2026. “In light of potential uncertainty created by the litigation, market participants may need additional time to prepare for compliance,” Atkins said in October.</p><p style=\"text-align: start;\">The Trump SEC withdrew 14 rules proposed during the Biden administration, including some related to reforming stock trading, subjecting crypto platforms to stock exchange rules, and the use of predictive analytics and “gamification” by brokerages apps.</p><p style=\"text-align: start;\">“The agenda reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority,” Atkins said in a statement this past year.</p><h2 id=\"id_378299020\" style=\"text-align: start;\">Retail’s Resilience</h2><p style=\"text-align: start;\">One good thing to come out of GameStop was that it got some retail investors more involved in the process, Fischer says. We the Investors, an organization co-founded by Dave Lauer, a longtime advocate for retail investors, has sent more than 10,000 comment letters to the SEC, advocating for things like transparency and fairness in markets, investor choice and control, best execution, as well as better settlement and clearing.</p><p style=\"text-align: start;\">“It really exposed the guts of the market to people that had never paid much attention to it up until then,” says Lauer, who is also the co-founder of Urvin Finance. “Like a lot of things on Wall Street, I think it exposed a lot of unfairness, a lot of rent-seeking and a lot of regulatory capture. And I think those things really resonated.”</p><p>Retail participation has remained a major force in markets, driving big moves in everything from electric vehicles to anything that touches artificial intelligence.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/54e41ddf987adf70ef717f9e0ff4051c\" tg-width=\"968\" tg-height=\"652\"/></p><p>Though some investors stuck around in GameStop and <a href=\"https://laohu8.com/S/AMC\">AMC Entertainment Holdings</a>, other meme traders found new targets. In July, meme stock investors calling themselves the “Open Army” swarmedOpendoor Technologiesand turned activist: They rallied against former CEO Carrie Wheeler and in favor of co-founder Keith Rabois. Wheeler left the company in August, and Rabois joined the firm’s board with co-founder Eric Wu in September. Shares have traded sideways ever since.</p><p style=\"text-align: start;\">Then there’s crypto.</p><p style=\"text-align: start;\">“Everything that happened in GameStop is happening in crypto markets but on steroids,” says Fischer. “As chaotic as GameStop was, it’s even more chaotic and there’s less oversight in the crypto market.”</p><p style=\"text-align: start;\">A resurgence in meme stock chatter this past year led Roundhill Investments to relaunch its <a href=\"https://laohu8.com/S/MEME\">MEME Stock ETF</a>, which first launched in December 2021—right around a short-term peak for the Nasdaq. The tech-heavy index fell 33% in 2022, and the ETF was closed in November 2023.</p><p style=\"text-align: start;\">Roundhill CEO Dave Mazza says this time, the ETF is actively managed and rebalanced at least weekly. The firm is targeting a universe of stocks with high implied volatility and interest among the retail investor community.</p><p>“In today’s meme stock world, it’s really more so about cutting-edge themes,” Mazza says. “It’s more about themes that retail can kind of be the price-setter in.”</p><p style=\"text-align: start;\">Meanwhile, brokerages like Robinhood, Interactive Brokers, and Charles Schwab have been engaged in an arms race to meet customer needs.</p><p style=\"text-align: start;\">“Overall, the customer base is becoming much more sophisticated,” Interactive’s Peterffy says. “People certainly learned a lot about the market. That’s for sure.”</p><p style=\"text-align: start;\">Robinhood says that 90% of the 2.5 million accounts it added in January 2021 are still on the platform.</p><p>The brokerage was up to 26.9 million funded customers in November 2025. Steve Quirk, Robinhood’s chief brokerage officer, tells <em>Barron’s</em> that many of the people who came into Robinhood through meme stocks have grown up a bit getting involved in retirement accounts, high-yield savings accounts, and other less exciting avenues of investing.</p><p style=\"text-align: start;\">“We have kept up with them,” Quirk says. “And it’s sort of their evolution. They were 20-something-year-olds. Now, maybe they’re in their 30s. And they’re sort of progressing along the path that a lot of people take with respect to investing.”</p><p style=\"text-align: start;\">There’s even been a bit of a shift on Reddit, the online platform that birthed the rowdy WallStreetBets forum. A Reddit spokesperson says the personal-finance group has seen a 117% increase in posts and comments from the end of 2020 through 2025. The investment interest group, which is led by rowdier subreddits like WallStreetBets and Superstonk but also includes the stocks and investing forums, has seen a 49% uptick in posts and comments from the end of 2020 through the end of 2025.</p><p style=\"text-align: start;\">Fidelity, among Wall Street’s more conservative firms, is using Reddit to reach users on its own investment forum. “I think that’s a massive difference that you wouldn’t have seen in 2021,” says Rob Gaige, Reddit’s global head of Insights.</p><p style=\"text-align: start;\">Likewise, brands that were once shunned by Reddit users are now being embraced on the platform. “They’re really adding tremendous value, and I think are becoming an essential part of how Reddit works,” Gaige says.</p><h2 id=\"id_5544620\" style=\"text-align: start;\">The More Things Change…</h2><p style=\"text-align: start;\">Despite all the new tools and platforms, the central character in the January 2021 GameStop saga doesn’t think retail investors are in a better spot than five years ago.</p><p style=\"text-align: start;\">“Retail investors have more access, but they don’t have the same advantages as institutional capital,” says Ryan Cohen, who joined GameStop’s board on Jan. 11, 2021, as a private investor, sparking the stock’s furious rally. “They don’t have the size. In many ways, it’s still very similar to the way it was before. But I’d say, generally, incentives are a big part of the problem.”</p><p style=\"text-align: start;\">“There’s more institutional money than ever,” adds Cohen, who became GameStop’s chairman in June 2021 and its CEO two years later. “It’s concentrated in hedge funds, private equity, these gigantic pools of capital. And when you have capital that’s that concentrated, and you’ve got these money managers that are collecting fees—and in most cases, it’s not really tied to much—it distorts prices, and it distorts behavior.”</p><p>The Wall Street titans of the GameStop saga have done well. Melvin Capital, the short seller that retail investors wanted to squeeze the most, shut down a year after GameStop’s peak. But founder Gabe Plotkin has remade himself as a sports executive, leading a group that bought the Charlotte Hornets National Basketball Association team in 2023. He told the Mislaibeled podcast last year that “at the end of the day, life’s pretty good.”</p><p style=\"text-align: start;\">His mentor Steve Cohen also caught plenty of flak from retail investors when Point72 Asset Management joined Ken Griffin’s Citadel to invest $2.75 billion for noncontrolling revenue share in Melvin. Cohen’s $8.1 billion plan with Hard Rock for a casino complex near Citi Field was approved by New York’s gaming commission in December.</p><p style=\"text-align: start;\">For Griffin, CNBC reported that his Citadel hedge fund was set to return $5 billion in profit early this year. The boom in retail trading has also been great for Griffin’s market-making firm, Citadel Securities.</p><h2 id=\"id_2792712193\" style=\"text-align: start;\">GameStop 2.0</h2><p style=\"text-align: start;\">One area where things have changed drastically in the five years since January 2021 are the balance sheets of some of the meme stock companies themselves.</p><p style=\"text-align: start;\">The original meme stocks were targeted by investors in part because they had high short interests. At the time, short sellers were betting big against physical retailers and companies that faced liquidity problems that were exacerbated by pandemic shutdowns.</p><p style=\"text-align: start;\">“What was unique about this meme stock phenomenon, from where we sat as distressed-credit investors, is that there were a lot of companies that had seen their revenue decline materially, or even go to zero, for a period of time due to Covid,” says Jason Mudrick, founder of hedge fund Mudrick Capital Management.</p><p style=\"text-align: start;\">Mudrick Capital was one of the firms that actually made money on the meme stock phenomenon, by lending firms money and buying their debt on the open market for pennies on the dollar.</p><p style=\"text-align: start;\">“They’re both still in existence because they went out and raised a tremendous amount of capital off of a very inflated stock price and utilized the irrational behavior of the mass market, the mass forces there, to capitalize their business and avoid insolvency,” Mudrick says of GameStop and AMC.</p><p style=\"text-align: start;\">Cohen says, “The business would be bankrupt by now, that’s for sure,” if he hadn’t got involved. “It would look like all the other retailers that have gone bankrupt. It’s a long list: J.C. Penney. RadioShack. Circuit City.”</p><p style=\"text-align: start;\">Though GameStop shares pulled back from their late-January peak, the stock has stayed well above where it traded in 2020. The higher prices provided the company an opportunity to sell billions of dollars in stock, which GameStop has used to significantly pay down long-term debt.</p><p style=\"text-align: start;\">“They were one of the smart meme stock companies that took big advantage of the moves and sold a lot of equity,” says Jim Chanos, the famed short seller and founder of Kynikos Associates. “They liquefied their balance sheet and gave themselves a cushion, which was a very, very smart thing to do. A lot of meme stocks and short-squeeze stocks more recently have not done that.”</p><p style=\"text-align: start;\">The company ended the third quarter of 2025 with $8.8 billion in cash, cash equivalents, and marketable securities. It also held $519.4 million in Bitcoin. The company has $4.16 billion in long-term debt. Though AMC is still navigating a massive debt load, the theater chain has so far managed to avoid bankruptcy by issuing stock.</p><h2 id=\"id_3717826442\" style=\"text-align: start;\">Adapt or Die</h2><p style=\"text-align: start;\">While retail investors hunt for the next GameStop, Wall Street managers are trying their best to avoid one.</p><p style=\"text-align: start;\">“It was a humbling experience for a lot of sophisticated financial investors to see such an irrational behavior driving markets so violently,” says Mudrick. “A lot of people lost a lot of money, and some very smart investors got put out of business because of this meme stock phenomenon.”</p><p style=\"text-align: start;\">While long/short funds haven’t stopped shorting, managers are much more aware of the risk of a stock becoming the next GameStop on social media, according to Mudrick. “Everybody’s got a tremendous amount of tools in place to understand that risk,” he says. “And that was not something anybody really focused on.”</p><p style=\"text-align: start;\">One of those tools is VandaTrack. Vanda, the independent research firm that specializes in positioning and flow, began developing its tool to track retail investor activity in 2020. It launched in early 2021, just as Wall Street scrambled to find tools to better understand the meme stock crowd.</p><p style=\"text-align: start;\">Viraj Patel, partner and deputy head of research at Vanda, says institutional investors now keep tabs on retail data for risk management and idea generation. He says the first question clients often have when a short starts squeezing is whether retail is behind it.</p><p style=\"text-align: start;\">“It’s still a pretty new science,” says Patel. “I don’t think anyone has quite solved how to think about, but at the same time, more and more people just cannot afford to not stay on top of it.”</p><p style=\"text-align: start;\">Abnormal retail flows can also act as an early warning system for clients who are invested in frothier parts of the market favored by retail. He says VandaTrack flagged abnormal flows in stocks that surged in early September and early October before pulling back later in the fall.</p><p style=\"text-align: start;\">Sell-side and buy-side trading desks use third-party providers like Vanda to keep tabs on which single stocks have the largest retail following, and how they have been trending over time, says Jeffrey Favuzza, vice president of equities trading at Jefferies. Even just opening X (formerly Twitter) has become a way for traders to suss out unexplained moves, Favuzza says.</p><p style=\"text-align: start;\">When retail investors do pile into a stock, companies now have a game plan. Mudrick says companies, on his advice, have put paperwork in place to quickly issue stock if the meme crowd swoops in. The process can take months to push through, so firms need to plan in advance or risk missing out on the chance to capitalize on a surge.</p><p style=\"text-align: start;\">“We’ve learned from it that this can happen, and these companies should be ready,” Mudrick says. “And I think that’s very common. I think the lawyers are advising their clients that you should do this, so I do think it has changed things in that everybody is now prepared.”</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU0963586101.USD":"ALLIANZ GLOBAL SMALL CAP EQUITY \"AT\" ACC","BK4588":"碎股","GME":"游戏驿站","BK4108":"电影和娱乐","LU1363072403.SGD":"Fidelity Global Financial Services A-ACC-SGD","AMC":"AMC院线","LU2237957902.USD":"NIKKO AM GLOBAL EQUITY \"F\" (USD) ACC","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","BK4598":"佩洛西持仓","LU2237957811.SGD":"NIKKO AM GLOBAL EQUITY \"F\" (SGD) ACC","BK4539":"次新股","MEME":"Roundhill Meme Stock ETF","BK4585":"ETF&股票定投概念","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","BK4076":"电脑与电子产品零售","BK4127":"投资银行业与经纪业","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU0971096721.USD":"富达环球金融服务 A","BK4547":"WSB热门概念","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","BK4577":"网络游戏"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2605435426","content_text":"Five years ago, investors in a videogame retailer teetering toward bankruptcy nearly toppled the global financial system.The so-called GameStop revolution inspired books, countless blogs, TV specials, and even a Hollywood film. But for a short time, financial markets were headed toward a far more dramatic conclusion.“Wall Street would have collapsed,” says Thomas Peterffy, the billionaire founder and chairman of Interactive Brokers. “We were sitting there, really, really shaking in our pants.”Peterffy says brokerages like Interactive Brokers had a lot of customers who purchased GameStop stock on margin at low prices. Those shares were fair game for the brokers to loan out to short sellers, who bet that they could pay back the loan in the future by buying the stock at a lower price.If those margin customers sitting on large paper gains sold a fraction of their shares to pay back their loans, the brokers who lent out the relevant stock would be forced to recall the shares. Short selling in GameStop infamously outnumbered the total number of shares available for trading, so brokers would have needed to rush to the market and “bid it up to infinity,” Peterffy says. The system wouldn’t be able to handle that kind of spiral.“I expected that it would happen,” Peterffy says of such a spiral in the price of GameStop shares. “Of course, I didn’t know that these people didn’t know what the rules were.”In fact, the GameStop investors had a new set of motivations—hold the stock no matter what. That stubborn approach may have protected the system from collapse.Five years later, the mechanisms that would have allowed that spiral are still unpatched, Peterffy says. Though the GameStop saga initially inspired aspirations for big changes on Wall Street, the actual results have been a mixed bag. Regulators scrambled to patch leaks in the financial system; brokers raced to capture a surge in demand from retail customers; the underlying companies capitalized on meme stock traders; and Wall Street, as it often does, found its way back to the top.For many individuals, the GameStop saga permanently changed what it means to invest. Trading volumes from retail investors soared during the meme craze and have remained elevated ever since. Brokerage firms are in an arms race to keep up with this increasingly sophisticated clientele, who have discovered the excitement—and often short-term rewards—of speculation across stocks, cryptocurrencies, sports betting, and, most recently, prediction markets.Plugging Regulatory LeaksShares of GameStop hit a record high—a split-adjusted $120.75 a share on Jan. 28, 2021. It was the same day that brokerages like Robinhood Markets and Interactive Brokers halted purchases of GameStop and other highly shorted stocks. The firms said they were responding to a surge in deposit requirements from the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation, which clears trades.The move killed momentum in meme stocks; retail traders, regulators, executives, and members of Congress have been dealing with the fallout ever since.“Now, it’s a matter of opinion whether or not that trading halt ended up protecting customers or harming customers,” says Amanda Fischer, who served as chief of staff for Gary Gensler, the chair of the Securities and Exchange Commission during the Biden administration. “But I can tell you, a large number of customers were very upset that they didn’t get access to those trades.”The trading halt sparked a wave of congressional hearings and provided the SEC with plenty of ammo to reform markets. Gensler says the halts represented a market failure. “That was really bad.”“You really want to lower the risk of that. Access to the market is a fundamental tenet of good, clean, fair, efficient markets,” he says.Five years later, Gensler says the risk of everyday investors being shut off from their brokerage accounts is “far less likely” following SEC rule changes to improve clearinghouse efficiency under the Biden administration, including the move to T+1, which shortened the time trades take to settle to one day from two days. That said, “it’s not impossible. You get a very big stress event like a brokerage firm failing, a client might be cut off from their account,” Gensler says. “But I think the events of those days, we took that risk way down.”The SEC’s report on the January 2021 events identified four areas for potential study and further consideration: 1) forces that may cause a brokerage to restrict trading; 2) digital-engagement practices and payment for order flow; 3) trading in dark pools and through wholesalers; 4) short selling and market dynamics.Ultimately, Gensler issued dozens of rules after his April 2021 confirmation, including disclosures tied to short sales and stock loans.Many of those rules have been delayed by lawsuits or withdrawn by the Trump administration.“Honestly, I think it’s very hard for regulators to address these issues given the current litigation environment,” says Fischer, who now serves as policy director at Better Markets.Interactive Brokers has suggested a handful of rule changes that Peterffy argues would fix the vulnerabilities in the financial system that the GameStop saga exposed. First is a daily publication of short interest. Another proposal would make the margin required on short selling to increase as the short interest rises. Currently, a short seller must put 150% of the value of a short sale in a margin account, which includes the price of the sale and an additional 50% of the value. Peterffy wants that additional maintenance margin requirement to rise as the short interest increases above 50%Another rule proposed by Interactive Brokers would limit the ability to open new positions when the short interest hits 100%. As it stands, short interest could theoretically rise to multiples of the shares available for trading, as the same borrowed stock goes from one short seller to the next.More generally, the 2021 meme craze raised broad questions about fairness in markets.The SEC faced some calls to ban payment for order flow, the controversial practice where market makers pay brokerages for the right to match buyers and sellers so they can profit on the difference. Payment for order flow underpins commission-free trading, but it has also been described by many, including Gensler, as a conflict of interest.Gensler says the better option was to lower the cost of the market by reducing the minimum price increment for a stock quote to a half cent from a penny and lower the fees exchanges charge for access to one-tenth of a cent per share from three-tenths.“I really thought it was better to lower the cost of the market,” Gensler says. “The half penny versus a penny might not sound like a lot, but that’s 50%. And we lowered access fees by 67%. These things are big.”A court upheld the tick size and exchange fees rules, but the SEC under Paul Atkins pushed compliance to November 2026. “In light of potential uncertainty created by the litigation, market participants may need additional time to prepare for compliance,” Atkins said in October.The Trump SEC withdrew 14 rules proposed during the Biden administration, including some related to reforming stock trading, subjecting crypto platforms to stock exchange rules, and the use of predictive analytics and “gamification” by brokerages apps.“The agenda reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority,” Atkins said in a statement this past year.Retail’s ResilienceOne good thing to come out of GameStop was that it got some retail investors more involved in the process, Fischer says. We the Investors, an organization co-founded by Dave Lauer, a longtime advocate for retail investors, has sent more than 10,000 comment letters to the SEC, advocating for things like transparency and fairness in markets, investor choice and control, best execution, as well as better settlement and clearing.“It really exposed the guts of the market to people that had never paid much attention to it up until then,” says Lauer, who is also the co-founder of Urvin Finance. “Like a lot of things on Wall Street, I think it exposed a lot of unfairness, a lot of rent-seeking and a lot of regulatory capture. And I think those things really resonated.”Retail participation has remained a major force in markets, driving big moves in everything from electric vehicles to anything that touches artificial intelligence.Though some investors stuck around in GameStop and AMC Entertainment Holdings, other meme traders found new targets. In July, meme stock investors calling themselves the “Open Army” swarmedOpendoor Technologiesand turned activist: They rallied against former CEO Carrie Wheeler and in favor of co-founder Keith Rabois. Wheeler left the company in August, and Rabois joined the firm’s board with co-founder Eric Wu in September. Shares have traded sideways ever since.Then there’s crypto.“Everything that happened in GameStop is happening in crypto markets but on steroids,” says Fischer. “As chaotic as GameStop was, it’s even more chaotic and there’s less oversight in the crypto market.”A resurgence in meme stock chatter this past year led Roundhill Investments to relaunch its MEME Stock ETF, which first launched in December 2021—right around a short-term peak for the Nasdaq. The tech-heavy index fell 33% in 2022, and the ETF was closed in November 2023.Roundhill CEO Dave Mazza says this time, the ETF is actively managed and rebalanced at least weekly. The firm is targeting a universe of stocks with high implied volatility and interest among the retail investor community.“In today’s meme stock world, it’s really more so about cutting-edge themes,” Mazza says. “It’s more about themes that retail can kind of be the price-setter in.”Meanwhile, brokerages like Robinhood, Interactive Brokers, and Charles Schwab have been engaged in an arms race to meet customer needs.“Overall, the customer base is becoming much more sophisticated,” Interactive’s Peterffy says. “People certainly learned a lot about the market. That’s for sure.”Robinhood says that 90% of the 2.5 million accounts it added in January 2021 are still on the platform.The brokerage was up to 26.9 million funded customers in November 2025. Steve Quirk, Robinhood’s chief brokerage officer, tells Barron’s that many of the people who came into Robinhood through meme stocks have grown up a bit getting involved in retirement accounts, high-yield savings accounts, and other less exciting avenues of investing.“We have kept up with them,” Quirk says. “And it’s sort of their evolution. They were 20-something-year-olds. Now, maybe they’re in their 30s. And they’re sort of progressing along the path that a lot of people take with respect to investing.”There’s even been a bit of a shift on Reddit, the online platform that birthed the rowdy WallStreetBets forum. A Reddit spokesperson says the personal-finance group has seen a 117% increase in posts and comments from the end of 2020 through 2025. The investment interest group, which is led by rowdier subreddits like WallStreetBets and Superstonk but also includes the stocks and investing forums, has seen a 49% uptick in posts and comments from the end of 2020 through the end of 2025.Fidelity, among Wall Street’s more conservative firms, is using Reddit to reach users on its own investment forum. “I think that’s a massive difference that you wouldn’t have seen in 2021,” says Rob Gaige, Reddit’s global head of Insights.Likewise, brands that were once shunned by Reddit users are now being embraced on the platform. “They’re really adding tremendous value, and I think are becoming an essential part of how Reddit works,” Gaige says.The More Things Change…Despite all the new tools and platforms, the central character in the January 2021 GameStop saga doesn’t think retail investors are in a better spot than five years ago.“Retail investors have more access, but they don’t have the same advantages as institutional capital,” says Ryan Cohen, who joined GameStop’s board on Jan. 11, 2021, as a private investor, sparking the stock’s furious rally. “They don’t have the size. In many ways, it’s still very similar to the way it was before. But I’d say, generally, incentives are a big part of the problem.”“There’s more institutional money than ever,” adds Cohen, who became GameStop’s chairman in June 2021 and its CEO two years later. “It’s concentrated in hedge funds, private equity, these gigantic pools of capital. And when you have capital that’s that concentrated, and you’ve got these money managers that are collecting fees—and in most cases, it’s not really tied to much—it distorts prices, and it distorts behavior.”The Wall Street titans of the GameStop saga have done well. Melvin Capital, the short seller that retail investors wanted to squeeze the most, shut down a year after GameStop’s peak. But founder Gabe Plotkin has remade himself as a sports executive, leading a group that bought the Charlotte Hornets National Basketball Association team in 2023. He told the Mislaibeled podcast last year that “at the end of the day, life’s pretty good.”His mentor Steve Cohen also caught plenty of flak from retail investors when Point72 Asset Management joined Ken Griffin’s Citadel to invest $2.75 billion for noncontrolling revenue share in Melvin. Cohen’s $8.1 billion plan with Hard Rock for a casino complex near Citi Field was approved by New York’s gaming commission in December.For Griffin, CNBC reported that his Citadel hedge fund was set to return $5 billion in profit early this year. The boom in retail trading has also been great for Griffin’s market-making firm, Citadel Securities.GameStop 2.0One area where things have changed drastically in the five years since January 2021 are the balance sheets of some of the meme stock companies themselves.The original meme stocks were targeted by investors in part because they had high short interests. At the time, short sellers were betting big against physical retailers and companies that faced liquidity problems that were exacerbated by pandemic shutdowns.“What was unique about this meme stock phenomenon, from where we sat as distressed-credit investors, is that there were a lot of companies that had seen their revenue decline materially, or even go to zero, for a period of time due to Covid,” says Jason Mudrick, founder of hedge fund Mudrick Capital Management.Mudrick Capital was one of the firms that actually made money on the meme stock phenomenon, by lending firms money and buying their debt on the open market for pennies on the dollar.“They’re both still in existence because they went out and raised a tremendous amount of capital off of a very inflated stock price and utilized the irrational behavior of the mass market, the mass forces there, to capitalize their business and avoid insolvency,” Mudrick says of GameStop and AMC.Cohen says, “The business would be bankrupt by now, that’s for sure,” if he hadn’t got involved. “It would look like all the other retailers that have gone bankrupt. It’s a long list: J.C. Penney. RadioShack. Circuit City.”Though GameStop shares pulled back from their late-January peak, the stock has stayed well above where it traded in 2020. The higher prices provided the company an opportunity to sell billions of dollars in stock, which GameStop has used to significantly pay down long-term debt.“They were one of the smart meme stock companies that took big advantage of the moves and sold a lot of equity,” says Jim Chanos, the famed short seller and founder of Kynikos Associates. “They liquefied their balance sheet and gave themselves a cushion, which was a very, very smart thing to do. A lot of meme stocks and short-squeeze stocks more recently have not done that.”The company ended the third quarter of 2025 with $8.8 billion in cash, cash equivalents, and marketable securities. It also held $519.4 million in Bitcoin. The company has $4.16 billion in long-term debt. Though AMC is still navigating a massive debt load, the theater chain has so far managed to avoid bankruptcy by issuing stock.Adapt or DieWhile retail investors hunt for the next GameStop, Wall Street managers are trying their best to avoid one.“It was a humbling experience for a lot of sophisticated financial investors to see such an irrational behavior driving markets so violently,” says Mudrick. “A lot of people lost a lot of money, and some very smart investors got put out of business because of this meme stock phenomenon.”While long/short funds haven’t stopped shorting, managers are much more aware of the risk of a stock becoming the next GameStop on social media, according to Mudrick. “Everybody’s got a tremendous amount of tools in place to understand that risk,” he says. “And that was not something anybody really focused on.”One of those tools is VandaTrack. Vanda, the independent research firm that specializes in positioning and flow, began developing its tool to track retail investor activity in 2020. It launched in early 2021, just as Wall Street scrambled to find tools to better understand the meme stock crowd.Viraj Patel, partner and deputy head of research at Vanda, says institutional investors now keep tabs on retail data for risk management and idea generation. He says the first question clients often have when a short starts squeezing is whether retail is behind it.“It’s still a pretty new science,” says Patel. “I don’t think anyone has quite solved how to think about, but at the same time, more and more people just cannot afford to not stay on top of it.”Abnormal retail flows can also act as an early warning system for clients who are invested in frothier parts of the market favored by retail. He says VandaTrack flagged abnormal flows in stocks that surged in early September and early October before pulling back later in the fall.Sell-side and buy-side trading desks use third-party providers like Vanda to keep tabs on which single stocks have the largest retail following, and how they have been trending over time, says Jeffrey Favuzza, vice president of equities trading at Jefferies. Even just opening X (formerly Twitter) has become a way for traders to suss out unexplained moves, Favuzza says.When retail investors do pile into a stock, companies now have a game plan. Mudrick says companies, on his advice, have put paperwork in place to quickly issue stock if the meme crowd swoops in. The process can take months to push through, so firms need to plan in advance or risk missing out on the chance to capitalize on a surge.“We’ve learned from it that this can happen, and these companies should be ready,” Mudrick says. “And I think that’s very common. I think the lawyers are advising their clients that you should do this, so I do think it has changed things in that everybody is now prepared.”","news_type":1,"symbols_score_info":{"MEME":1.86,"AMC":2,"GME":1.97}},"isVote":1,"tweetType":1,"viewCount":24,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
