GameStop (NYSE:GME) shares have continued to cool following a trading frenzy that drove GameStop shares up by 75 percent between the close of trading on Friday, May 31, and the start of trading on Monday.
The short-lived rally, which brought GameStop’s share price to US$40.09 Monday morning, was sparked by a social media post late Sunday on Reddit (NYSE:RDDIT) by an account tied to the video game retailer's most prominent supporter, Keith Gill.
The user, who ignited the meme stock craze back in 2021 and is also known as Roaring Kitty on other platforms, posted a screenshot on Reddit's Superstonk subreddit that shows a purported US$175 million position in GME shares and call options.
However, late Monday, concerns arose when the Wall Street Journal reported that there had been discussions among executives at Morgan Stanley's (NYSE:MS) trading platform E*Trade about potentially banning the trading account that is believed to belong to Gill. It remains to be seen if E-Trade will remove the account from the platform, and how a decision could affect the famous meme stock.
Gamestop’s share price closed Monday at US$28.00, up 21 percent over the prior trading day, and moved down 5.5 percent through Tuesday’s trading session to close at US$26.50.
This recent surge marks the second time in a month that GameStop's stock has experienced such frenzied activity. Back in mid-May, Roaring Kitty's return to the social media platform X, formerly known as Twitter, drove the stock up by 180 percent over two days. Back in 2021, GameStop's share price surged as high at US$86.88 in a coordinated short squeeze.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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