The New GameStop Meme Coin Is Trying to Recreate GME Stock’s 2021 Surge

You can quickly see where a stock is strong or weak, and with one click, you can view the underlying data and sector averages to perform your evaluation. The Quant Ratings and Factor Grades are appropriate for both short- and long-term investors. The Value, Growth, and Profitability factors identify mispriced securities, and the Momentum and EPS Revisions factors recognize timeliness. These core investment metrics are measured to support our quantitative algorithms, and SA offers top-notch tools with customizable screens and filters to create a portfolio suited to your needs. Meme stocks have taken the world by storm and many Meme stocks have high levels of short interest. Stocks with high levels of short interest are susceptible to short-term price swings.

(Plenty of people have already been doing that anyway.) But the level of triumphalism in the movie is a lot. Regular people playing the stock market is fine if that’s what they want to do, but to play the Wall Street game isn’t to overthrow it. Most retail investors are in it to try to make money, not remake the system, and most don’t even do that. The short Interest data metric as an investment factor has been the flavor of the year. Historically, it is a pretty poor factor for forecasting long-term performance. After all, most investors short stocks because it is perceived they have poor investment fundamentals.

  1. He is the former editor of Tom Yeung’s Profit & Protection, a free e-letter about investing to profit in good times and protecting gains during the bad.
  2. Seeking Alpha’s Very Bullish Quant recommendations are up YTD 50.65% compared with the S&P 500, up 26.41%.
  3. According to Benzinga, the coin then plunged by over 85% after its X (formerly Twitter) account was banned.
  4. Therefore, it may not be out of the realm of possibility that could be a hit this year.
  5. This is a massively simplified explanation of something called shorting, or short selling – words you might’ve seen cropping up in your feeds in the last few days.

The episode took out Melvin Capital — even after getting extra money injected, the hedge fund eventually went under. It’s the kind of story I could have maybe told pretty soon after the phenomenon began, though it was never that clear-cut — plenty of normie retail investors were just out to make money, just like the people betting on sports and crypto. The sticking-it-to-the-man narrative has never been a clean one. And two and a half years later, the overall GameStop story has become a whole lot messier. Last year’s meme stock trading frenzy might have come to an abrupt end in 2022, but the market remains rife with high-short-interest stocks that could be ripe for a short squeeze.

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“If GameStop truly believes in the value of its shares, it should use its excess cash to buy back stock,” Pachter added. In a note to clients, Goldman chief U.S. equity strategist David Kostin said there are still stocks with heavy bets built up against them from Wall Street investors who bet on stock’s decline by selling shares they don’t own. “And the act of capitulation is basically to buy back their short position, which will even drive the stock higher.”

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Heck, short interest in HRTX has been above 10% since mid-2018. The result is something of a shakeup in the list of stocks with highest short interest, as measured by the percentage of shares outstanding sold short. Although a number of meme stocks remain, many have been replaced by more traditional short bets.

As a senior writer at AOL’s DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities. Then you check wallstreetbets, Stocktwits, and Twitter to capture the sentiment. The strategy is to simply squeeze the shorts and we love this. Use the Top Gainers signal and screen for stocks with a float short over 10%. The strategy is that once a heavily shorted name starts running, momentum players jump on board and the shorts are forced to cover as the stock climbs.

Despite high hopes for a pivot under the stewardship of Ryan Cohen, the co-founder of the pet e-commerce company Chewy who has inspired much of the GameStop crowd’s bullishness, the business isn’t exactly hitting home runs. Cohen’s turnaround plan hasn’t really materialized, and the company has gone through multiple leadership changes. However, several headwinds exist that could hurt LTRY stock’s chances. Second, entered the public arena via a reverse merger with a special purpose acquisition company.


Grube was the formerly the chief financial officer at Chewy, among other executive roles in the e-commerce space. She feels tied to the GameStop community (though she now frequents the message boards less) and is sure the company has plans, though she’s not sure what they are. And hey, maybe the Mother of All Short Squeezes (MOASS) that some of GameStop’s most diehard fans are still holding out for will pan out. “Part of me is like, if it’s going to the moon, I’m not going to give up my seat, I’ve got my tickets,” she said. This website is using a security service to protect itself from online attacks. The action you just performed triggered the security solution.

However, what’s worth noting is that the next bear market has historically been caused by a new event or a new economic cycle. Other triggers include the dot-com bust and the coronavirus pandemic. The demand raised its share price massively, which nobody saw coming, and everyone who had banked on it dropping in value had to buy their shares back. People who buy and ema indicator sell stocks often bet on which companies won’t do well in the future. With fewer people out shopping due to the pandemic and most games being sold online, things weren’t looking great for the company. You’ve probably stared blankly at your WhatsApp chat as the words “GameStop”, “Reddit” and “stock market” get thrown around the way “pub” and “meet at 8” used to.

But during a market cycle of short squeezes, it is a highly coveted data point. For over a year, interest in this data point has run strong and speculator’s enthusiasm does not seem to be slowing. They rose to the public eye because of social media platforms like Reddit and Wall Street Bets. GME, along with Bed Bath & Beyond (BBBY, $14.06), AMC Entertainment (AMC, $18.84) and seemingly countless others, became meme stock darlings on social media platforms, most notably Reddit’s r/wallstreetbets (WSB) subreddit. The retail raiding hordes would pile into stocks with high short interest – in other words, companies where many outstanding shares are being used to bet against the stock – with the intention of setting off a short squeeze. This is what happened during the ‘Reddit Revolution,’ which we saw this past year.

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Mainly, this is due to how terrible CRSR stock has performed. Over the trailing one-year period heading into the first weekend of the new year, shares plummeted exactly 47%. Undoubtedly, some folks in the social media crowd jumped on CRSR stock last year, likely prompting negative feelings. Rising interest rates amid expectations for tighter monetary policy have hit growth stocks as a whole in 2022. But it has really clamped down on pricey high-short-interest meme stocks from last year. The unusually high price and volatility continued after the peak in late January.

The good news for investors right now is that there doesn’t seem to be a major threat to the economy on the horizon, but that could change faster than you think. Most market disruptions start out as unseen threats, after all. Based on this information, there doesn’t seem to be much of a historical pattern between hitting a new all-time high and how long the new bull market will last, as it’s ranged from just four months to nearly 11 years.

Below is an example of how the quant factor grades and quant rankings are displayed. Rather than trying to time the market based on new milestones, however, investors are better off buying high-quality stocks and sticking with them over the long term. With that strategy, you’ll benefit from the magic of compounding and from the S&P 500’s long-term track record of returning 9% or more a year — from bull to bear and back again. However, what we want to know is how long a typical bull market lasts after the first post-bear-market all-time high is reached.

Left of Citron Research made the announcement in a YouTube video, saying Citron Capital let go of the majority of their bets that GameStop stock would fall and took a “100%” loss in doing so. As the shares slowly edged up, these short sellers loomed large. Gill publicly touted GameStop stock long before it caught the eyes of Wall Street and the world. In a July 27, 2020, YouTube video posted to his channel, Gill said, “Some people won’t even tune into the stream right now when they hear I’m bullish on GameStop, at the current price point it’s traded at about four bucks right now.” Still, the company reported an operating loss of $63 million in the third quarter.

GameStop shares plunged nearly 20% the next day, closing on Dec. 9 at $13.66 a share. The stock market drama has been called a “David and Goliath” battle. “Our shorthand is, it’s not just a movie, it’s a movement,” Angelo said. Some big names lost money on GameStop, but others made a bundle.