GameStop and AMC: the retail revolt that won't die

The retail revolt against Wall Street turns five

January 2021. While half the world was still in lockdown, a group of anonymous investors turned GameStop, a struggling video game retailer, into a symbol of the fight against hedge funds. The rallying cry "Hold Paco, Hold" went viral. What began as a joke with options ended in a financial short circuit: short sellers lost $19.75 billion in a matter of weeks, according to S3 Partners data. Five years later, the war is not over: it has mutated into something stranger and more serious.

How the market script was broken

The mechanism was a textbook cornering: a stock with more than 100% of its float sold short, a huge community coordinated on Reddit, and a hammer of buy orders. By late January 2021, GameStop was trading above $340. Short positions totaled $11.2 billion, behind only Tesla and Apple. The key was in the options: 7,800 calls with a $320 strike ended up in the money, forcing the sellers of those options, probably Citadel and company, to buy 780,000 shares to hedge. That sent the price soaring.

The precedent of Volkswagen's 2008 "gamma squeeze" paled in comparison. The difference is that this time it wasn't executed by big funds, but by a herd of individuals with stimulus checks and free time. The house always wins, some warned. But that week, the house was on the ropes.

Robinhood, the system shows its cards

On January 28, Robinhood and other brokers halted buying of GME and AMC. The official excuse was margin requirements. The majority interpretation was different: an intervention to save the hedge funds that were losing billions. As reported at the time, the White House spokesperson was the sister of a Citadel portfolio manager, a coincidence that many saw as the icing on the cake.

Melvin Capital, one of the big losers, needed a $2.75 billion bailout from its backers Point72 and Citadel. In one week, the sector's losses went from $4 billion to $15 billion. Meanwhile, the brokers that called themselves "democratic" were selling their clients' order flow to the same funds those clients were betting against. Robinhood's business model was exposed: when the product is you, the service is something else.

The jargon was the strategy

They weren't 400,000 aimless kids, even if they looked like it. Beneath the noise of "diamond hands" and memes were analysts monitoring the percentage of open shorts and the options chain. The jargon worked as group discipline: making selling shameful and holding virtuous. Some compared it to the Vietcong: no tons of bombs, but gnawing at the opponent's ankles. Classic game theory assumes your rival seeks to maximize profit; here the watchword was a technical draw. If I lose, you lose more. That wasn't in the funds' models.

From meme to business: the Ryan Cohen era

While the media narrative buried the phenomenon, GameStop took an unexpected path. Ryan Cohen, founder of Chewy, took control, first as chairman and then as CEO. In April 2024 the stock traded at $9.95; in June of the same year, at $23.93, a 140% increase. Market cap went from $3 billion to $10 billion, though to achieve that the company issued 120 million new shares, something many fans of the original narrative saw as a betrayal: they were killing the "MOASS" (Mother of All Short Squeezes).

The move, however, paid off. In the first quarter of 2026 GameStop posted the highest net income in its history: $389.6 million. Accumulated cash exceeds $4 billion. Cohen has transformed a game store into a financial instrument with real profits. Skeptics talk of a zombie company; the faithful, of a new business model.

AMC: the second front that refuses to die

AMC, the cinema chain, became the loudspeaker of the resistance. Its CEO, Adam Aron, bought 250,000 shares with his own money on May 19, 2026 at $1.37: $300,000 out of his pocket. In the second quarter of 2026, the company reported record figures: $1.597 billion in revenue, $321 million EBITDA and $190 million free cash flow. It has refinanced its debt and pushed maturities out to 2029-2031. Meanwhile, IMAX 70mm screenings sell out at a price 81% above average. The market acknowledges that debt management has changed. Debt is down; skepticism, too.

The new board: GameStop wants to buy eBay

The latest move has left analysts stunned. Ryan Cohen has stated: "I want to own eBay. It's a great business that has been badly managed." As of August 14, 2026, GameStop owns 43,390,383 shares of eBay, 9.8% of the company. And on August 3, 2026, it announced the private exchange of $1.4 billion in senior convertible bonds for common stock. For some, a maneuver to simplify the balance sheet before a formal bid for eBay. For others, a new dilution that will punish current shareholders. GME stock fell 12% on the day of the announcement. Distrust coexists with admiration.

What remains of the revolt

Five years have passed since the January 2021 peak. The movement, far from disappearing, has shown that retail investors' memory is longer than Wall Street calculated. The SEC and regulators continue to scrutinize any coordination among individuals, but the basic tool, a group of millions of people willing to lose money for a cause, cannot be banned with a circular.

The disconcerting data point is not the revaluation. It's the psychology: there were investors who claimed to have entered with college money or a year's savings from McDonald's, aware of the risk, and still didn't sell. That's not fundamental analysis. It's a standoff against the system. And as long as there's a fund that thinks it's untouchable, someone will be willing to pull the trigger with a buy order. Hold Paco, hold.