What happened last week? GameStop stock soared, Robinhood halted trading, and the SEC said it would monitor the situation.

What happened last week? GameStop stock soared, Robinhood halted trading, and the SEC said it would monitor the situation.

What happened last week? An army of retail traders, led by Reddit's Wall Street Bets forum, poured money into shares of GameStop, a dying retail relic, as part of a battle against Wall Street short sellers. 

GameStop stock surged to record highs

As GameStop stock surged, loses mounted for short sellers like Melvin Capital and Citron Research. Hedge funds have lost billions on the stock this year. 

Some on Reddit said the stock rally was payback for the 2008 financial collapse. GameStop, which had nearly died in 2019, ended the trading week with a market cap of about $22.67 billion, according to Yahoo Finance. 

Read more: 'Anarchy never works': Webull CEO Anthony Denier told us why the SEC should intervene as an army of Reddit traders takes over the market “” and said membership exploded as people jumped ship from Robinhood

Robinhood temporarily paused GameStop trading

As retail traders pushed GameStop, AMC, and other stocks to record highs, retail investing app Robinhood temporarily restricted trades. Representative Alexandria Ocasio-Cortez called Robinhood's decision to block trading "unacceptable." Robinhood users launched a class-action suit against the app. 

The company said in a Friday blog post that its deposit requirements increased so rapidly that it had to block purchases to "comfortably"