Editor’s Note: This article was originally published on January 13, 2023, and has been updated to remove a reference to Citadel Securities.

An epic battle that saw retail traders take on hedge funds played out in early 2021 and centered around video game retailer GameStop Corp. (NYSE:GME).

Here’s a look back at what happened, what’s happened since and what could be next.

What Happened: Struggling video game retailer GameStop became the target of short sellers betting on a further decline or bankruptcy. Community support on the r/Wallstreetbets subreddit and other social media outlets led to an epic short squeeze story that dominated the headlines in early 2021 and throughout the year.

One of the places where the short squeeze story gained steam was on Benzinga’s “Power Hour” show, where Citron Research’s Andrew Left joined to share his thesis on why he was betting against GameStop.

On Jan. 21, Left was interviewed live and the video had thousands of messages in the chat defending GameStop’s future growth and why Left was wrong.

The stock rose on the day and over the next several days, leading the Benzinga interview to be one of the places considered as the “room where it happened.”

Two other central figures in the GameStop storyline were Ryan Cohen and Keith Patrick Gill. 

Cohen is the founder of Chewy Inc (NYSE:CHWY) and is now the chairman of the video game retailer. Cohen took a 9% stake in GameStop which was announced in August 2020 and increased his stake to 13% in 2021, becoming a hero figure for those rallying around GameStop.

Keith Patrick Gill, who went by the handle Roaring Kitty on YouTube and DeepF***ingValue on Reddit, placed a $56,000 bet on GameStop through call options and posted his research to YouTube and Reddit. Gill’s investment was worth tens of millions of dollars in January 2021.

Retail traders were drawn to GameStop thanks to research online and also as a way to take on hedge funds and those betting against the video game company. News circulated that short interest in GameStop was more than 100% and investors saw an opportunity to squeeze out the shorts.

Citron and Melvin Capital were among the companies that suffered from the short squeeze. Melvin Capital held a large bearish position through puts and had to take on investments from other funds to help with liquidity issues.

Along with GameStop, several other stocks with high short interest became investments by retail traders and saw their prices soar and shares often trading in tandem with the video game retailer. Other popular short squeeze stocks at the time were AMC Entertainment Holdings Inc (NYSE:AMC), BlackBerry Ltd (NYSE:BB), Koss Corporation (NASDAQ:KOSS), among others.

Several stock brokers like Robinhood Markets Inc (NASDAQ:HOOD) restricted the buying and selling of certain high volatile stocks, leading to an outcry from investors.

GameStop shares hit a high of $483 on Jan. 28 and traded between $17.08 and $483 in 2021.

The GameStop Aftermath: Court cases and legal battles raged after the events of the GameStop short squeeze.

Accusations came against Robinhood for working in tandem with market makers such as Citadel.

“In order to protect the firm and protect our customers, we had to limit buying in these stocks,” Robinhood CEO Vlad Tenev said.

The Robinhood CEO called what happened with GameStop shares a one in 3.5 million event and said the restrictions on shares were done due to compliance with clearinghouse deposit requirements.

Members of Congress pressured Robinhood and other companies involved for how they may have hurt consumers.

After suffering big losses from being short GameStop and receiving threats, Left exited his position and also announced he would no longer publish short reports on companies, instead choosing to focus on stocks that could be multi-baggers or increase multiple times over their current price.

Left has since published several short reports.

The storyline of GameStop captured strong media attention and has also been turned into several documentaries. “GameStop: Rise of the Players” was released in theaters and later available on streaming platform Hulu.

HBO and HBO Max, both owned by Warner Bros. Discovery (NASDAQ:WBD), released “Gaming Wall Street.”

Netflix Inc (NASDAQ:NFLX) released the docuseries “Eat the Rich: The GameStop Saga.”

The documentaries included interviews with many of the central figures in the GameStop story and also featured retail traders who shared their perspectives of what happened.

Thanks to Cohen’s involvement with GameStop, many investors followed him into investing in struggling retailer Bed Bath & Beyond Inc (NASDAQ:BBBY), another stock that has been the subject of short squeezes as it faced liquidity and restructuring issues with Cohen previously holding a large stake. Cohen exited his position in the company in 2022. 

Related Link: Ryan Cohen, GameStop Traders Celebrate Anniversary Of January 2021 Meme Stock Frenzy

What’s Next: Over the past year, GameStop shares have traded between $15.41 and $49.85. The stock had started trending higher over the last couple of days with short interest of over 20%, potentially from investors remembering the anniversary of the David vs. Goliath battle.

While several documentaries have been released on the story, at least one more movie is in the works. Seth Rogen and Pete Davidson are set to star in a movie called “Dumb Money” based on the 2021 book “The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees” by Ben Mezrich.

Mezrich was also the author of “The Accidental Billionaires,” which was turned into the movie “The Social Network” about the early days of Facebook, a unit of Meta Platforms Inc (NASDAQ:META).

Investors continue to search for short squeezes, with some remembering the events of GameStop and the quick price action that can happen if investors get behind the move. Benzinga publishes a weekly look at five short squeeze candidates and also has a page dedicated to the most shorted stocks.

Stocks attracting investor attention as short squeeze candidates in early 2023 include Bed Bath & Beyond, Carvana Co (NYSE:CVNA) and Blue Apron Holdings Inc (NYSE:APRN).

The events that happened with GameStop will likely never happen again, with updated rules and regulations in place.

Read Next: David Vs. Goliath Fight Spills From GameStop To The U.S. Consitution 

See the Andrew Left video here!

Photo: Yalcin Sonat via Shutterstock