What happened
Another day, another big change for GameStop (NYSE: GME) stocks, which shot up 18% higher on Monday, with no news except the dynamic crowd on Reddit pleading for bulls.
And
Unless you have just emerged from a coma, you know that the video game retailer’s shares have been especially volatile, as brokers have piled up stocks to punish short sellers who overreacted by selling more shares than were available to trade .
The resulting massive squeeze caused short sellers to lose billions of dollars and triggered hearings in Congress about what happened.
Image source: Getty Images.
Although GameStop’s shares eventually returned from the stratosphere, they remained high nonetheless. And one of the central players behind the mess, Keith Gill, who is known as Roaring Kitty and a few other colorful identifiers, said he remains optimistic about the company.
In fact, he may have sparked the latest round of speculation by announcing that he doubled his stake in the retailer. The stock has risen 150% since then.
What now
Traders are still eager to rekindle the excitement that surrounded GameStop in the early days of the frenzy, so volatility will be the watchword for some time to come.
Trying to follow these trends is a foolish mission because the same forces that drove your actions up the first time are nowhere to be seen, and the fundamentals of the business do not support such a high valuation.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.