The Stock of Gamestop Continues to Climb Amid Squeeze Chatter

Shares of GameStop Corp. extended their upward momentum on Wednesday, climbing 2% in premarket trading following a 2.2% gain during Tuesday's session.

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The stock has now risen for three consecutive trading sessions and in five of the last six sessions, according to Dow Jones Market Data. On Monday, GameStop shares surged 6.3%, contributing to the stock’s overall rally.

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The company had not issued a press release since November 18, when it announced the appointment of Nat Turner to its board of directors, until late Tuesday. At that time, GameStop revealed it would release its third-quarter results on December 10.

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Despite the lack of significant corporate announcements in recent weeks, GameStop has seen its stock price soar more than 50% over the past month, according to Stocktwits, a social platform for investors and traders.

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Strong Interest from Retail Investors

Noor Al, Stocktwits’ Director of Community, noted a significant buzz surrounding GameStop on the platform. Speaking to MarketWatch, Al said, “There is a lot of discussion” about the stock, which was ranked fourth on Stocktwits’ most-active stocks list as of Tuesday. Earlier in the day, GameStop had briefly held the No. 1 spot.

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Stocktwits engaged its users with a poll asking whether GameStop was entering a new short squeeze or simply experiencing a pump. Within five hours, 2,300 people had responded, with 60% believing a new squeeze was forming. Another post inviting GameStop holders to interact received 800 likes within just four hours, a notably high level of engagement for a single post, Al added.

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Short Interest and Trading Volume

As of now, short interest in GameStop represents 8.2% of its public float, indicating a considerable number of bearish bets against the stock. Trading volume has also surged, with 21.67 million shares changing hands compared to the 65-day average of 10.12 million shares.

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Influence of Keith Gill’s Return

The recent rise in GameStop’s stock can, in part, be attributed to the return of influential trader Keith Gill, known as “Roaring Kitty.” Gill was a key figure in the 2021 meme-stock phenomenon that sent shares of GameStop and AMC Entertainment Holdings Inc. soaring.

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Gill made his comeback to social media on June 7 with a YouTube livestream—his first in three years—where he discussed his continued belief in GameStop. He highlighted what he saw as an “overemphasis” on the company’s legacy business while emphasizing that GameStop is undergoing a transformative phase. Gill also expressed confidence in the company’s CEO, Ryan Cohen. “I believe this guy—he might be able to do it,” Gill remarked during the livestream.

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Leadership Under Ryan Cohen

Ryan Cohen, who co-founded and previously led Chewy Inc., took over as GameStop’s CEO in September 2023. His appointment represents the latest step in his efforts to revitalize the struggling retailer. Known for his innovative strategies, Cohen’s leadership has sparked optimism among some investors who view him as capable of steering GameStop through its transformation.

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However, Gill’s activity has since quieted. His last post on X (formerly Twitter) came on September 6, featuring a cryptic message widely interpreted as a reference to Chewy. The following month, regulatory filings revealed that Gill had sold his stake in Chewy.

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GameStop’s Market Performance

GameStop shares have surged 73% in 2024, significantly outperforming the S&P 500 index’s 26.2% gain over the same period.

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Broader Implications

The continued rally in GameStop shares highlights the ongoing interest from retail investors in meme stocks, even as broader market conditions shift. While the company’s future hinges on its ability to execute its transformation strategy under Cohen’s leadership, the active trading and social media discussions underscore the unique role GameStop occupies in the stock market.

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The stock’s recent performance suggests that speculative interest, fueled by social media and influential figures like Keith Gill, remains a driving force. However, whether GameStop can maintain this momentum will depend on its ability to deliver tangible progress in its business transformation and upcoming financial results.

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