On Monday, May 13, 2024, Reuters reported that GameStop shares jumped a dramatic 40% in pre-market trading.
This spike occurred following the return of infamous ‘meme stock influencer’ Roaring Kitty–also known as DeepFuckingValue on Reddit, or Keith Gill in real life–to X.
Gill was a pivotal player in the 2021 GameStop stock surge and short squeeze.
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What was the GameStop short squeeze?
Perhaps the most notable tale of a meme stock is the saga surrounding GameStop.
GameStop, an American retailer specializing in video games, faced a downturn in the 2010s as the retail sector pivoted online and video games shifted from physical to digital formats.
In 2021, amid the pandemic, users on the Reddit forum r/WallStreetBets debated whether GameStop's stock was undervalued. They noticed its short interest exceeded 100%—meaning the stock was shorted more than the total number of available shares.
This fact, combined with a desire to “troll” and a goal to disrupt Wall Street investors who had bet against the stock, led the subreddit to collectively inflate the stock's price.
As the story gained momentum, people beyond r/WallStreetBets joined the fray, eager to participate. By January 26, short-sellers had incurred losses of $5 billion on GameStop alone.
The situation escalated as the meme and buying frenzy continued. The White House started monitoring the events. Gill himself faced investigation by the US government. In an ironic twist, the trading platform Robinhood restricted GameStop trades. This led to lawsuits, a congressional hearing, and significant financial rescues.
What is going on with GameStop now?
Eventually, GameStop’s stock price stabilized but had been on a general decline since January 2021.
That was until this month. Starting with the month of May 2024, GameStop has seen a steady rally, and is up 73.56% in the last month.
At the market open on Monday, GameStop’s shares had surged by roughly 54%.
At around $27, the shares are, however, still some ways away from its January 2021 peak of $81.25.
