On Tuesday, May 25, GameStop shares smashed 16.34% at $209.43, reaching its highest level since March 19 this year which is over $200.
The company is a retailer of video games, consumer electronics, and gaming merchandise based in Texas, USA.
The firm’s shares closed 46.5% above its knee-high close this month, so far.
Around 26% of the company’s float which is about 14.76 million shares were on loan as of May 24.
Over 14 million shares changed hands that marks the business’ hard-pressed trading day since mid-April.
Looking back, a short squeeze aided GameStop, sending shares on a 1600% run last January but the stock peeled off a lot of its gains the next month.
In recent weeks, other stocks like AMC Entertainment and Koss Corp. became popular on forums such as Reddit’s WallStreetBets. This phenomenon in stocks is called “meme stocks.”
Due to the popularity, AMC’s shares spiked 19.96% to $16.41 while Koss also tweaked 22.89% to $20.78.
As of the end of April, GameStop still had miscalculated almost 12 million of its shares. It constitutes about 18% of its outstanding shares.
On the part of the retail trading swarm, another collaborative effort could be formulated in creating another short squeeze that is akin to the one that happened last January.
However, it may have just about staying power. On the other hand, shares that were held short have shrunken by about 80% since then.
Whether that occurrence will happen again in the future, long-term investors should already have learned a lesson from the exponential growth in January and a succeeding downfall of GameStop.
In April this year, GameStop started clearing its debt. In the same month, the firm announced that it will decamp all of its outstanding arrears before May starts.
The company also stated that it attached $551 million to its bank account by selling 3.5 million of its shares by way of an at-the-market equity offering.
It also said that the business finished the first quarter of March with half-billion dollars.
This should allow the company to have all the financial reserves it needed to bring off its aspirations for future growth.
Earlier in April 2021, GameStop revamped the dimensions of its at-the-market equity offering to prepare for the sale.
Seemingly, this strategy found hopeful buyers for the stock.
Around $157.43 per share was the reported average purchase price which is the aggregation of its gross proceeds.
The company did all of these in preparation for its modification into an online-oriented video game dime store.