Is This the Return of the Meme Stock Frenzy? A Look at GameStop's Recent Surge

Unveiling the Factors Behind GameStop’s Resurgence and Its Implications for Investors

GameStop’s stock price soared dramatically on May 13th, 2024, triggering a wave of nostalgia for the meme stock frenzy of early 2021. The surge was ignited by a post on the social media platform X from Keith Gill, the retail investor known online as “Roaring Kitty,” who became a central figure in the original meme stock saga. However, a deeper examination of the data reveals that this recent surge is not a carbon copy of the 2021 mania. Several key factors differentiate the two events.

Short Squeeze Dynamics

A short squeeze, where short sellers are forced to buy back shares at inflated prices to cover their positions, was a significant driver of the 2021 meme stock frenzy. Short interest in GameStop remains high, currently sitting at around 24% of the float. This suggests that short sellers are still vulnerable, and a potential squeeze could occur. However, the level of short interest is not as extreme as it was in early 2021, indicating a less volatile situation.

Retail Investor Participation

Another crucial difference lies in retail investor participation. In 2021, retail investors piled into GameStop with unprecedented fervour, fueled by factors like pandemic stimulus checks and readily available credit. Order volumes from retail traders in stocks and exchange-traded funds accounted for a staggering 24% of the market’s total volume in the first quarter of 2021. This time around, the data suggests a more measured approach. While GameStop was the most actively traded stock on various platforms on May 13th, orders to sell shares nearly mirrored buy orders. This indicates that retail investors were likely trading amongst themselves rather than being the sole force behind the stock’s rise. Order volumes from retail traders in the first quarter of 2024 were also down to just over 17% of the market’s total volume, highlighting a less intense buying frenzy compared to 2021.

Higher Rates and Reduced Liquidity

The overall market environment in 2024 is vastly different from that of 2021. Back then, interest rates were near historic lows, and the Federal Reserve was actively injecting liquidity into the economy. This provided retail investors with ample cash to invest in riskier assets like meme stocks. However, the landscape has shifted dramatically. The Federal Reserve began raising interest rates in March 2022 to combat inflation, making borrowing more expensive and potentially dampening retail investor enthusiasm for risky bets. Additionally, credit card delinquencies are on the rise, suggesting that many retail investors may have less disposable income to invest compared to 2021.

The Rise of Alternative Investment Options

Another factor to consider is the emergence of alternative investment options. In 2021, meme stocks like GameStop were some of the most attractive bets for retail investors seeking high returns. However, the rise of cryptocurrencies and the increasing availability of online gambling have created a more diverse investment landscape. This diversification may be drawing some retail investor attention away from meme stocks.

GameStop’s share price closed at USD 30.45, marking a significant increase of USD 12.99 (+74.40%) during regular trading hours, ending at 4:00 PM EDT. After hours, the price continued to climb, reaching USD 36.90, up by USD 6.45 (+21.18%) by 8:00 PM EDT


While the recent surge in GameStop’s stock price has rekindled memories of the meme stock frenzy, a closer look reveals a less extreme event driven by different factors. Short sellers are still vulnerable to a potential squeeze, but the level of short interest is not as high as in 2021. Retail investor participation, though present, is not as intense as during the original meme stock frenzy. The Federal Reserve’s monetary tightening policies and the rise of alternative investment options have likely played a role in this more measured approach. It remains to be seen whether this is a temporary blip or a sign of renewed, but more cautious, interest in meme stocks from retail investors. Regardless, the events of May 13th, 2024 serve as a reminder of the ongoing impact of social media and retail investors on the stock market, even if the mechanics and market environment have evolved since the heady days of early 2021.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.