this is "nightline." >> tonight, game stopped. how a failing business dominated the stock market. >> game stop has now doubled. >> and became the face of the so-called reddit rebellion. now the first in-depth look at the financial frenzy that upended wall street. >> it became a little bit of a class war between institutional investors and retail investors. >> from the amateur investors looking to hit it big. >> oh my god, we're doing this. >> to the robinhood ceo caught in the middle. >> some people think you should go to jail. what do you say to that? plus, taking stock of the gamestop saga. >> i'm studying to reinvest my

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tonight, what if a few hundred bucks could earn you thousands in profits almost overnight? well, that's exactly what happened to some savvy investors who bet big on the once dying video game retailer gamestop. it sparked a sudden roller coaster of events that seemed to shake wall street to its core, and the aftershocks are still being felt as the twists and turns that brought us here are explored in a new documentary featuring abc's chief business correspondent rebecca jarvis. >> have you been following this story about gamestop and the stock market? >> the gamestop stock explosion. >> struggling video game retailer somehow becoming one of the hottest stocks on the market. how did this happen? >> it was a wall street revolution led by an internet mob, trying to flip the table on hedge funds and big banks. >> amateur investors have been leading a wild ride on wall street. >> reporter: their goal making money while also exposing deep cracks in the system of what they call the haves and the have

not. >> it's not just a story about the stock. it's the story about society, where we are now. >> going after major companies and ceos. some people do think you should go to jail. what do you say to that? >> a new documentary from abc news and our partners at hulu advertisemented "gamestopped" explores the david versus goliath showdown and the people at the center of it all. i. a 10-year-old san antonio boy is getting national attention after cashing in on the gamestop stock craze. >> he we have been in and out of gamestop. he was i want this, i want that. okay, kid, slow it down. that's what made me think oh, i need to start teaching this kid about money. i understand that's a company he loved. that's why i bought the stock. >> it is interesting to watch stocks grow and watch them fall. it's like a game. because you never know if you can lose a ton of money. >> no, no, no! >> or if you can make a big jump

like how i did. >> in its heyday, gamestop was games.but with the advent of on game stores like steam and amazon, gamestop shuttered many of its locations. in the last five years, its stock had fallen from 40 to $5 a share. >> so in 2014, this hedge fund named melvin capital started to short the stock. >> shorting a stock? i'll brake it doeak it down. can you see my feet? let's say i borrow an xbox from my friend nate. then guy and sell the xbox for $500. when the price drops, i buy the xbox back for $250. i give nate back his xbox and pocket the difference. i've just made $250 and that's exactly what the hedge funds were hoping would happen with gamestop. >> what they didn't perceive was that at a certain point bulls make money, bears make money,

but pigs get slaughtered. and they were pigs. >> and so the gamestop saga was set in motion. and it was an exacerbated by the pandemic. a stock like gamestop suddenly becomes 90% of your life because you're not going out to dinner with friends. >> people that were spending time at home and less time commuting and less time at work had time to go on to chat rooms and go on to boards. >> forums like the reddit wall street bets swapping trading tips. alicia haverland was one of them. >> i got into wall street bets on reddit 15 months ago. i was actually playing world of warcraft with a guy. and he goes oh, dude, you've got check out wall street bets. these guys are insane. and holy [ bleep ]. it was just chaos. >> alicia got intoed in stocks thanks to her grandmother. >> she would always pull us over and make us learn and explain to

us the stock market was sort of a rich person's game, but if you learn about it, it's not the hardest thing. and you can make money and never have to rely on the government or assistance or a man. >> if you buy, you have to be ready and willing to spend some time. >> and at the time we had been trying to find an app that would be easier for my grandmother to play the stock market. >> reduce position here right now. >> and robinhood seemed to be the easiest plug and play system. >> don't think you're an investor? you don't need to become an investor. you were born one. robinhood. >> founded by vlad near tenev, robinhood is an app that set out to democratize trading by letting users buy and sell stocks without having to pay a commission fee. soon it exploded in popularity, becoming the brokerage in people on wall street bets used to invest. >> we can do exactly what the

hedge funds have been doing forever, because we are a hedge fund, if you really think about it. if everyone's got a dollar and there are six million of news here, we have $6 million. what do we want to put $6 million to? >> boom. yeah, we're good to go. all right. we're going to play call of duty, marley. oh, i got hit. >> david dusty monroe is a father of two who works in sales. >> obviously, i followed gamestop stock. so i thought what's going on behind the scenes? there was a ton of large hedge funds who had shorted the stock. i firmly believe in gamestop. these hedge funds were betting against it. i never want to see anybody lose a lot of money. do i want to see the average joe make some money? absolutely do i want to do that. >> the group decided to throw their weight behind gamestop, at least in part because of keith gil, a prolific poster on that reddit forum wall street bets. he believed in gamestop's future potential and also spotted a

vulnerability to exploit. hedge funds had so heavily shorted the stock and backed themselves into a corner, there could be a giant short squeeze. >> hold up. short squeeze? i'll explain. remember my friend's xbox we talked about earlier? nate needs it back, but now i can't find a cheap one anywhere. the price is going up and up and up. the only one i can find is going cost me a thousand dollars. so i just lost $500. >> you get something called a short squeeze where a stock can go up big when the short seller can't find the stock that they sold. >> those folks have to buy more stock to cover the stock that they borrowed. >> enough people get on board, it can squeeze and go up. >> and suddenly huge numbers of buyers come in, and they take it up, and you are squeezed, because you can't find the stock that you need. and the next thing you know, you be wiped out.

>> this might be a great way to supplement my income and support a company that i believe in and that i love. >> so i threw the dice and let it roll. >> as gamestop stock rose, it was all anyone could talk about. >> let's get to gamestop. >> gamestop. >>this gamestop is really something we must talk about. >> almost overnight, the company's value surged from a couple hundred million to billions of dollars. >> my phone was going off because i have it on mia hoo watch list. i was you have to look at this. this doesn't happen very often, and there is no way it climbed that high. >> from reading reddit tonight, it is clear many of the users feel this is the average smalltim investor versus the big wall street banks. >> soon hedge fund titans like melvin capital started losing big money, billions of dollars. and for many, investing in gamestop became a kind of social movement. >> i'm willing to lose every penny because it's not about the money. it's about sending a message. >> but on the morning of january 28th, with the stock near

all-time highs, their plans got interrupted. >> i opened up the app. i saw that you could no longer press the buy button in robinhood, and i said holy [ bleep ]. >> robinhood restricted trading of 13 stock, including gamestop. >> a broker calling themselves robinhood -- let's think about the irony of that -- tells their users we're not going to allow you to buy and only sell. that's crazy. >> conspiracy theories started to fly on social media. >> robinhood has just shown themselves to be a piece of [ bleep ] company and a shell for the rich. so this is why you need to boycott them now. >> and i ended up smashing my phone pretty badly. >> by day's end, gamestop had tanked 44%. and even though most brokerages had restricted trading of gamestop, robinhood became the poster child for the rage because of that promise to

democratize trading. >> customers have been showing up right here at robinhood headquarters fenting frustration that they can't get in touch with anybody. somebody allegedly threw dog feces at the front door. >> reporter: robinhood ceo writing that the limiting trading stomach stocks is not because we wanted to stop people from buying any of these but because of the increase in collateral on the service. the outrage led to hearing and major backlash for the company's co-founder and ceo. some people do think you should go to jail. what do you say to that? >> well, i think it was based on this false premise that was harmful of me somehow colluding with hedge funds to do this, which is completely made up out of thin air, right. there is no evidence for it. and i think it was completely wrong. >> i guess the question is if you are attempting to

democratize trading here. >> yeah. >> and if an event like this can make it so that your customers don't have the same advantages in the market as a hedge fund, for example, have you failed? >> well, i'm not really sure what advantages hedge funds have. >> well, on january 28th, your customers couldn't buy a stock that hedge funds could. >> our customers couldn't open positions. but it's not like throughout this process hedge funds didn't feel any pain. i mean, you saw the melvin capital. they lost a lot of money through this process. so i think the story of hedge funds winning and retail customers losing is not quite the whole story here. it's actually in a way much broader than that because it's a systemic issue, like most broker dealer, many broker dealers had restrictions in place. this not only affected robinhood. every company, or most companies that were offering stocks put restrictions in place to some

degree. because nobody has infinite amounts of money. >> the wall street bets saga was a movement. the people who didn't previously feel they had a voice finding that they do have a voice and they can make an impact. and by raising their voices together, it can shine a light on areas of our society and in this case in our financial system where a light needs to be shined. >> dusty is now trying to start a class-action lawsuit after selling his shares at a 30% loss. alicia is still holding 200 of her original shares. >> i hope that this energizes people. it has put wall street on notice, and we got in the room in a system that is designed for you to never be in the room. and we are. >> it's a game that's still playing out with new winners and losers every day. and just last week, gme stocks soared again, surpassing its january 28th closing price.

today it tanked nearly 17%. >> is the game over? i don't think so. >> and "gamestopped" is now streaming on hulu. coming up, how one essential worker leveraged the power of gamestop shares to create extra cash during the pandemic. ♪ ♪ (quiet piano music) ♪ ♪ comfort in the extreme. the lincoln family of luxury suvs. microban 24 doesn't just sanitize and stop. it keeps killing bacteria for 24 hours.

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hansalu. he used his family's stimulus money to buy 100 shares of gamestop, earning almost $40,000 in profit. joining us chief business correspondent rebecca jarvis, who has been reporting this for months. thank you for joining us. take us back to that day. in the summer of the pandemic, you get this stimulus check. your wife is pregnant. you're struggling to pay bill, and you make an investment in gamestop. why? >> my wife was pregnant and i was in a predicament of i needed extra income for my family that could go a long way. affect us ipo positively a lot. i decided to start studying and looking into stocks. eventually i came across gamestop. i'm very happy i did, because it ended up very well for me and my family. >> you got out without losing your shirt. you still investing now? >> i am.

i'm studying a lot to reinvest my money. some of it for tax purposes, but also just for the long run so that my newborn daughter can have a great college education and my wife can get some extra time off of work and just for our family's future. >> now rebecca, we know for every success story, there are plenty of people who lose tons of money, especially during the gamestop phenomenon. so many are still suffering now during the pandemic, are set to receive another stimulus check. is there another gamestop brewing out there, and should people try to ride that wave? >> every single day, there are more companies like gamestop that come up. now the thesis behind them isn't necessarily trying to ride out a short squeeze or take on hedge funds, but they look for undervalued companies where there is a lot of chatter around the name. amc is part of this trend. blackberry is part of this trend. while there are chances that you could win, that you could get some upside, there is also

significant risks associated with investing in individual stocks. and that's just really important to know and it's so important that you do your own homework before you put money into one of these stocks. >> and rebecca, where is all this heading? is this a war on wall street? is this a big disruption, or is the scc going to crack down and change the rules of the game? >> hedge funds are taking it seriously. i have talked to a number of them. they are rethinking their investments, in part because of what this group means for the market. you heard it from gabe plotkin, the head of marvin capital, one of the funds that lost the most money. in the hearing before congress, he said he is rethinking business and they will perform differently. the bigger question here is what the s.e.c., if anything does. they're reviewing this right now. and they have to balance giving people like arya the opportunity to make these style of investments with protecting people like arya from a world where if he were to lose everything, it would be incredibly costly. and that's going to be the

balancing act for regulators going forward. >> well, so much food for thought. thank you, arya. congratulations and good luck in the future. rj, thanks for joining us. >> thank you so much for having me. >> thanks, juju. up next, sharing 15 minutes of serenity at the vaccination clinic with yo-yo ma. ♪ did you know prilosec otc can stop frequent heartburn before it begins? heartburn happens when stomach acid refluxes into the esophagus. prilosec otc uses a unique delayed-release formula that helps it pass through the tough stomach acid. it then works to turn down acid production, blocking heartburn at the source. with just one pill a day, you get 24-hour heartburn protection. prilosec otc. one pill a day, 24 hours, zero heartburn.

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and finally tonight, the surprise performance. ♪ turning a vaccination clinic into a concert hall in pittsfield, massachusetts. world renowned cellist yo-yo ma receiving his second and final covid vaccine and separating the moment by serenading others waiting along with him. a dose of hope for all.

and that is the healing power of music. that's "nightline." you can watch all of our full episodes on hulu. we'll see you right back here same time tomorrow. thanks for staying up with us. good night, america.