- GameStop’s stocks skyrocketed by 160% in a matter of hours on Monday to an all-time high of $159, giving birth to the ‘Meme Stock’ bubble in the stock market.
GameStop, an American video game and gaming consoles retailer, has been on a slow decline for years. With high-speed internet and technological advances facilitating direct games downloads and the pandemic restricting sales volume, GameStop’s mall-based business model has become a relic of the pre-Internet era.
However, GameStop’s stocks have skyrocketed since the start of 2021. They rose by 160% in a matter of hours on Monday morning to an all-time high of $159.
The seeming inevitability of GameStop’s demise made it an obvious target for short sellers, giving birth to what can be called a ‘Meme Stock’ bubble.
This rapid rise was fuelled by small-time retail investors on Reddit’s r/wallstreetbets forums, who made a conscious collective effort to drive up stock prices by concentrated buying of GameStop stocks - making it the most-shorted stock on the US markets as per the latest filings.
While it seems like the current stock market has lost touch with reality, this GameStop fiasco is representative of a new dynamic between Redditors and Wall Street, and a remarkable testament to the internet’s ability to facilitate collective action.