SINGAPORE, July 14 — A short squeeze on GameStop stock, driven by retail investors organising on the Reddit forum r/WallStreetBets, sent the company’s share price surging from around $20 to a peak of $483 on January 28, 2021. The episode, which captured global attention and reshaped conversations about market access, was fuelled by heavy short interest from hedge funds including Melvin Capital, which had bet against the struggling video game retailer.
For communities across Asia, where retail trading was also booming during the pandemic, the event raised urgent questions about whether ordinary investors were playing on a level field. The commission-free trading app Robinhood, founded in 2013, became the primary platform for the wave of retail traders.
During the COVID-19 pandemic, the app added millions of new accounts, many from younger users who had time and stimulus money to start investing. Closer to home, similar platforms in Southeast Asia and India saw parallel surges in first-time investors drawn by zero-commission trading and easy access to US markets.
When the trading gates slammed shut
On January 28, 2021, at the height of the frenzy, Robinhood and other brokerages temporarily restricted trading in GameStop and other volatile stocks. The company cited collateral requirements from clearinghouses, which demanded more cash to back the risky trades. For the retail investors who had piled in, many of them trading from their phones in Manila, Jakarta, and Bangkok, the restriction felt like the rules had changed mid-game.
The stock price, which had been climbing on collective enthusiasm, subsequently fell back to around $40 by mid-2021. The incident triggered Congressional hearings in February 2021, where Robinhood CEO Vladimir Tenev testified about the decision to halt buying.
Lawmakers pressed him on whether the move protected the market or protected hedge funds that were losing billions. The Securities and Exchange Commission later released a report in October 2021 analysing the event, noting that it highlighted the impact of social media and retail trading on market dynamics. For regulators in the Philippines, Malaysia, and Thailand, the GameStop saga became a case study in how online communities could move markets faster than any institutional analyst.
What the SEC report found
The SEC’s October 2021 report did not assign blame but documented how the combination of high short interest, social media coordination, and zero-commission brokerages created a perfect storm. The report noted that the event underscored the growing influence of retail investors, who had been dismissed by Wall Street for decades. For families across the region who had started investing during the pandemic, the takeaway was clear: the game had changed, but the rules had not yet caught up.
GameStop’s stock price stabilised at around $40 by mid-2021, far below the January peak but still double its pre-squeeze level. The company itself, under new leadership, began a turnaround effort that included e-commerce and cost-cutting.
But for the millions of retail investors who rode the wave, the lasting impact was not about one stock. It was about whether the markets would ever truly be open to everyone.
