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Published: Feb 01, 2022 8 min read

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A man stops and looks at the GameStop store in New York City
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The GameStop trading frenzy was when everyday investors teamed up to beat the pros at their own game, right?

Wrong — in fact, the whole saga was actually a real money maker for Wall Street. That’s according to Spencer Jakab, author of the new book “The Revolution That Wasn’t: GameStop, Reddit, and the Fleecing of Small Investors” and editor of The Wall Street Journal’s “Heard on the Street” column.

Jakab's book centers on the GameStop stock price surge that garnered massive attention in early 2021. Wall Street and Main Street became obsessed with the story of how everyday investors on the subreddit r/WallStreetBets started a bull case for the video game retailer and pushed its stock price from around $20 at the end of 2020 to more than $300 by the end of January 2021. Short sellers like hedge funds paid the price, fueling a stick-it-to-the-man attitude among retail investors. Other familiar-but-struggling companies like Hertz and AMC joined the meme stock fray.

But the GameStop story also led to heightened scrutiny over payment for order flow, the controversial way in which trading apps like Robinhood are paid for customers’ trades from “market makers” like Citadel Securities. And in the end, Wall Street might have been the winner after all.

Below is Jakab’s conversation with Money, edited and condensed for clarity.