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GameStop stock worth $359 million ‘failed to deliver’ following frenzied short-squeeze


GameStop coronavirus New York
Selling video games, consoles and more at GameStop.

  • More than 1 million GameStop shares were deemed ‘failed-to-deliver’, according to a Bloomberg report. 
  • $359 million in stock was in limbo, with buyers lacking cash or sellers not having the shares to settle trades, according to data from the Securities and Exchange Commission. 
  • The SEC’s data track securities that had at least 10,000 shares that failed-to-deliver on a daily basis.
  • Visit the Business section of Insider for more stories.

More than 1 million shares of GameStop were deemed failed-to-deliver after a massive short-squeeze sent the price of the video-game retailer’s stock soaring, Bloomberg reported on Wednesday, citing data from the Securities and Exchange Commission.

The shares, worth about $359 million, were considered failed-to-deliver either because buyers lacked cash to complete purchases or sellers did not have the shares to settle trades, according to SEC data that focused on January 28.

That day, online brokerage Robinhood and others restricted trading in GameStop, with the move coming after retail traders on Reddit’s WallStreetBets forum stoked a short-squeeze on the heavily shorted stock. GameStop hit an all-time high of $483 on January 28 before plunging to a close of $193.60.

GameStop stock jumped more than 1,700% from Jan. 1 through Jan. 27. The price surge resulted in losses for short-bias hedge funds such as Melvin Capital.

“Fails-to-deliver can occur for a number of reasons on both long and short sales,” the SEC disclaims on its website, Bloomberg noted. “Therefore, fails-to-deliver are not necessarily the result of short selling, and are not evidence of abusive short selling or ‘naked’ short selling.”

The SEC report covers trading from Jan. 15 through the end of the month. The regulator twice a month releases data tracking securities that had at least 10,000 shares that failed-to-deliver on a daily basis, the report said.



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