Reddit subreddit r/wallstreetbets users celebrated a recent increase in GameStop’s stock prices. The users’ goal is to “send the stock price to Pluto.”
GameStop’s stock (GME) saw a huge surge in its share price on Tuesday, Feb. 23. The stock climbed over 100% just one day after GameStop announced its chief financial officer, Jim Bell, will resign in March.
Last month, GameStop was caught up in a battle between short-sellers betting on the company’s failure and a wide array of retail investors. The retail investors lobbied through social media outlets, particularly the Reddit subreddit r/wallstreetbets, to coordinate the short squeeze.
A short squeeze is when the price of a stock starts to spike, causing short-sellers to quickly buy-back the stock before the contractually obligated date in an effort to cut their losses.
Reactions to the short squeeze have varied, including in the media. Some figures consider the plight of Reddit’s retail investors a triumph of regular people against Wall Street, while others are defensive of hedge funds and market stability.
There have been calls for government regulation of some kind following last month’s squeeze.
During a Congressional hearing on Feb. 18, Democrats and Republicans went after Robinhood and its CEO, Vladimir Tenev, for halting trades during the squeeze. This ultimately harmed retail investors. The hearing also featured Reddit investor Keith Gill, known as RoaringKitty and u/DeepF——Value to the Reddit community.
No concrete action has been taken in relation to the short squeeze outside of tweets, public statements and this congressional hearing.
As the stock price of GME rose today, r/wallstreetbets users celebrated. Just as before, the users are energized to “send the stock price to Pluto.” Their goal was Mars during the initial short squeeze. An overview of the subreddit’s posts indicate a strong desire to push the share value back to $400 and up.
GME is currently experiencing a significant increase in trade volume. Certified financial planner Jay Peters is a strategy and allocation specialist with St. Louis based MSMF Wealth Management. He explained to The Journal the increased demand for a stock will cause its share price to rise.
“Anytime there is an increase in people buying shares, the price will go up,” Peters said.