What’s going on with $GME?

The story behind the internet’s favorite “meme stock”.

If you use social media or keep half an eye on financial news, you’ve probably seen something a little surprising. $GME, the stock symbol for GameStop, has risen in value a massive 5,275.30% in price. But what’s going on here?? And what even is a naked short anyway??

2019

Let us go back to 2019, a time before COVID, and meet the protagonist of this story — GameStop.
GameStop is a business in trouble. A brick-and-mortar store stuck in the 2010s that has been unable or unwilling to adapt to the digital and on-demand nature of modern consumers. Ironic really for a tech and electronic retailer to be so behind the times. To put it simply — things are looking pretty bad for GameStop. At the end of 2019 they posted a loss of $470 million.

2020

Fast forward to March 2020 — COVID is now running riot around the world.

Unsurprisingly, GameStop's performance is not helped by a deadly pandemic, and sales drop even further. They plan to close hundreds of stores nationwide. At this point, the stock price is ~$4.
The rest of 2020 is a mixed bag for GameStop. While having no traffic to physical stores is definitely causing some pain, it turns out that people who are stuck at home all day every day quite like to play video games. This brings GameStop back into the picture, pushing the stock price to about ~$19 by the end of the year. Not too shabby for a company in trouble.

And there is more good news too. In late 2020 Ryan Cohen, billionaire investor/businessman, decides that he’s bullish on $GME. He takes a 13% share of the company for himself and aims to rejuvenate GameStop by increasing online/digital market share. This is the kind of thing that investors like to hear and helps $GME reach a decent end-of-year value.

$19 is good, but this is just the start of it.

2021

By January, Ryan Cohen is now a serving member on the GameStop board. Again this is good news for bullish $GME investors as it really looks like Cohen is the savior of GameStop. The stock responds accordingly to the increased media and bullish news, and rallies to a new high of ~$40.