The 6 wildest GameStop short squeeze revelations from Netflix's "Eat the Rich" documentary

The series highlights the 2021 GameStop short squeeze, which caused major losses for hedge funds and short sellers

By Joy Saha

Staff Writer

Published September 29, 2022 7:43PM (EDT)

Eat the Rich: The GameStop Saga (Netflix)
Eat the Rich: The GameStop Saga (Netflix)

In January 2021, the biblical tale of David and Goliath became a reality of sorts in the high-stakes world of Wall Street.

In this modern rendition, Goliath was Wall Street hedge funds short sellers, while the underdog David was the retail investors seeking revenge on the aforementioned bullies. The tale's conclusion ends on a triumphant note — or a tragic one, depending on how you choose to interpret it — with a short squeeze of the stock of GameStop, the once-failing video game and consumer electronics retailer.

The short squeeze — where investors bet against a particular stock that rapidly increases in price — was fueled by a Reddit forum called r/wallstreetbets. Collectively, the group used a series of app-based brokerage services, most commonly Robinhood, to purchase an influx of shares to cover for the nearly 140% of GameStop's public float — the portion of outstanding stock that is available for trading by public investors — that had been sold short. Their initiatives were in full swing by August 2020 and later, reached its peak in January 2021 after countless business hot shots joined their efforts.

The rare occurrence, now known officially as the GameStop short squeeze, is narrated in Netflix's latest docuseries, "Eat the Rich: The GameStop Saga." Over the course of three episodes, the series spotlights a few Redditors who took part in the epic showdown along with hedge fund managers, finance experts and the journalists who covered the dramatic news.

Here are six of the wildest revelations from the recent series:

The controversial post that started it all
Eat the Rich: The GameStop SagaAlvan Chow from "Eat the Rich: The GameStop Saga." (Netflix)
Alvan Chow, a retail investor and Redditor, prompted the GameStop short squeeze via his post on r/wallstreetbets. In the documentary, Chow said he first became interested in the GameStop drama after Ryan Cohen, the founder and CEO of the e-commerce company Chewy, invested in the dying brick-and-mortar store. Amid his research, Chow learned that GameStop's stock price rose 30% but on a more shocking note, around 140% of Gamestop shares were short, thus leading to the conditions for a short squeeze.
For a better perspective on the percentage, Bob Sloan, founder of the New York City-based software company S3 Partners, said, "The way we calculate it, anything 7 to 10% is kinda normal. Things start ticking around 20%, it gets on the watch list. Thirty, 40 or 50, that's very, very high."
When the stock price begins to rise in such a manner, short sellers may buy back their shares to assuage their losses. However, that can also drive the stock price up even higher, which is basically a recipe for disaster.
"A true short squeeze is a rare event. There are probably a hundred predicted for every one that occurs," said Chow. "There needs to be an unexpected positive event to start to drive the stock price higher. This could be a huge earning surprise or a takeover offer."
On Reddit, Chow wrote, "Sup gamblers. Feel bad about missing the gain train on Tesla? Fear not, something much greater and stupider is here. We're going to temporarily join forces with the Galactic Empire and hijack the Death Star. Our choice of weapon, GME."
Many members of WallStreetBets disagreed with Chow. But a handful of individuals also supported his manifesto, especially after they came across a man named Keith Gill — also known as Roaring Kitty on YouTube and u/DeepFuckingValue on Reddit — whose online analyses of the GameStop stock played a large role in the short squeeze. 
The unexpected surge
Eat the Rich: The GameStop SagaJoe Fonicello from "Eat the Rich: The GameStop Saga." (Netflix)
By the end of August 2020, Cohen purchased more than 6 million shares of GameStop. Three months later, he sent an open letter to the GameStop board, outlining a new vision for the company. And then, on January 8, 2021, he tweeted a series of cryptic memes that alluded to a future success with the company.
One meme simply said, "How you know it's going to be a fun ride," while another was a single photo of the now-defunct Blockbuster video store franchise. On Jan. 11, it was announced that Cohen would receive three seats on the GameStop board.
Cohen's accomplishments along with GameStop's imminent successes encouraged more Redditors, like retail investor Joe Fonicello, to buy more shares.
"I threw in the rest of my savings. I was like, 'I'm in. The short squeeze is gonna happen.'"
Shortly afterward, the stock price of GameStop began increasing at a faster rate than ever seen before.
"We bought it about $8 a share, and now . . . we were in the 30s," Fonicello added. "You had more and more people on WallStreetBets buying up shares of GameStop."
Unbeknownst to many individuals outside of the group, the short squeeze had already begun at that point. Prior to Cohen's acquisition of the board seats, GameStop's stock traded around seven million shares a day, the series explained. Afterward, that number jumped to an astounding 144 million.
Andrew Left got left behind
Eat the Rich: The GameStop SagaAndrew Left from "Eat the Rich: The GameStop Saga." (Netflix)
As the price of GameStop's shares continued to rise, short sellers scrambled to prevent their anticipated losses in profits. Like clockwork, Citron Research, an online investment newsletter that provides stock market commentary, tweeted that the price of GameStop stocks would drop from $30 to $20 in no time.
"Gamestop $GME buyers at these levels are the suckers at the poker game," the full tweet read. "Stock back to $20 fast."
Andrew Left, an activist short seller, author and editor of Citron Research, had also shorted the stock and alleged that a short squeeze would not take place. Left was a "polarizing" figure within the WallStreetBets community — some individuals hailed him as a hero for exposing fraudulent companies while others called him a phony and awarded him the moniker "S**tron Research."
"The irony of the whole GameStop story is I got caught on the side of what's considered Wall Street, and historically, I've been the 'anti'- Wall Street person," Left said. "I put my money where my mouth is. So I was short GameStop and if I'm short GameStop, I'm gonna tell you the reasons why."
He added, "Me personally who is short the stock, I have no problem selling the stock higher. You're not going to change the underlying fundamentals of this company."
But Left's thesis stood no chance against the Internet, which was set on finalizing the short squeeze. A few retaliators even attacked Left's personal life by hacking his social media accounts and using his name and photos to create a slew of fake Tinder profiles.
GameStop becomes (in)famous
Eat the Rich: The GameStop SagaEat the Rich: The GameStop Saga (Netflix)

In addition to garnering attention on Reddit, the GameStop hoopla became popular on Instagram, YouTube and TikTok. Per Taylor Lorenz, The Washington Post's technology and online culture reporter, the short squeeze was "completely driven by influencer culture."


One such influencer was Matt Kohrs, a retail investor and YouTube "finfluencer" who gained millions of views after he posted livestreams on GameStop's stock. The short squeeze also caught the attention of prominent figures in the business world, including Chamath Palihapitiya, the founder & CEO of Social Capital, who had a reputation of sticking up for retail investors.


"Tell me what to buy tomorrow and if you convince me I'll throw a few 100k's at it to start," he tweeted on January 26, 2021. "Ride or die."


Similarly, Bitcoin investor Cameron Winklevoss also tweeted, "Thinking about going long GameStop $GME. Thoughts?"


The hype was further fueled by Elon Musk, who took to Twitter to simply write, "Gamestonk!!" More people, primarily Musk's fans and followers, began investing in GameStop's stocks.


"I got involved in GameStop straight-up because of Elon, dude," said Chris "Krispy" Ream in the documentary. "Elon posted 'Gamestonk!!.' I was reading all this stuff. I was like, 'Well, Elon's a genius. Gotta jump into this, right?'"


He continued, "My whole plan is to make a TikTok house. I just want to do TikToks all day in a big mansion with pretty girls. That's it."


Even the state of Alaska and The Church of Jesus Christ of Latter-day Saints invested in GameStop shares.

The devastating losses
Eat the Rich: The GameStop SagaEat the Rich: The GameStop Saga (Netflix)
Hedge funds were hit hard by the short squeeze as many lost billions of dollars, per Sloan.
"We knew individual investors were trading more than ever, but I have never seen anything like this come together so quickly and lead to such an insane rise in a stock price," recounted Gunjan Banerji, a reporter for The Wall Street Journal's Money & Investing team.
According to the series, Gabriel Plotkin's Melvin Capital Management, the hedge fund that originally shorted GameStop, lost $6.8 billion in just one month. In January 2021, other hedge funds began buying back the stock, which only pushed GameStop's stock price up even further. By the end of the month, GameStop short sellers had lost nearly $20 billion.
"The sentiment was exactly one of revenge," said Kohrs. "Not only did people make money on the ride up, but finally, we made hedge fund Wall Street pay."
Derik, a retail investor, Redditor and rapper alongside Rachael, Mikey Guggenheim, added, "A lot of these people that bought GameStop stock, they watched their parents' whole savings or retirement funds just go to nothing basically, 'cause of the subprime mortgages. So it's like, getting back at the hedge funds."
Robinhood's shady deals
Eat the Rich: The GameStop SagaGunjan Benerji from "Eat the Rich: The GameStop Saga." (Netflix)

On Jan. 28, Robinhood prohibited users from purchasing GameStop shares, thus causing a frenzy. According to a 2021 CNBC report, following the controversial move, "shares of GameStop initially reversed their gains, sliding quickly into negative territory. The stock, which traded about $500 at one point in premarket trading, closed down 44%."


Retail investors, politicians and finance experts accused Robinhood of market manipulation and claimed that the investing app was wrongfully making money off of people's addiction to trading.


"They have designed their user interface in a way that taps into some of these psychological blind spots to make people trade more," said Dr. Vicki Bogan, professor of economics at Cornell University. "The research indicates that even if you're aware of a blind spot, it doesn't necessarily eliminate its effect on your behavior."


Per Scott Galloway, a podcast host and New York University professor, "Robinhood is similar to a lot of other big tech companies and that is it's based on the attention economy. And that is the more it can get you to trade, the more time it can get you to spend on the app, the more money it makes.


"Robinhood's incentives are not for you to learn, not for you to generate wealth, but for you to engage in a trading activity that historically has resulted in less wealth and less economic security, and that is day-trading."


Many Redditors and conspiracy theorists on Twitter also speculated that Robinhood had made a shady deal with Citadel Securities, a market making firm that was Robinhood's primary customer, and Melvin Capital Management. To add to the mess, Citadel LLC, which is the sister company of Citadel Securities, invested $2.75 billion into Melvin Capital in January 2021.


As a result, a slew of class action lawsuits were filed against Robinhood. But despite the allegations, executives for Robinhood denied claims that Citadel had pressured them into limiting the trading of GameStop. In June 2022, however, the House Committee investigating the GameStop debacle concluded that Robinhood and Citadel Securities were indeed in communication with each other.


"There is a power shift and I think it's important to acknowledge that literally Tiktok and Twitter and Reddit, they've become forums for information and they clearly can move markets," claimed Banerji.

"Eat the Rich: The GameStop Saga" is now available for streaming on Netflix. Watch the trailer below, via YouTube:

By Joy Saha

Joy Saha is a staff writer at Salon, covering Culture and Food. She holds a BA in journalism from the University of Maryland, College Park.


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Documentary Eat The Rich Gamestop List Netflix Short Squeeze Tv Wall Street