GameStop Stock Soars Amid Retail Trading Frenzy

MarketWatch

Traders on popular online forum Reddit have been actively buying GameStop stock

GameStop Corp. (GME) stock has been surging in recent days, fueled by a buying frenzy among retail traders. The stock has more than doubled in value over the past week, and it is now trading at around $300 per share. This surge in buying activity has been attributed to a number of factors, including a short squeeze, increased interest from retail traders, and the company's recent partnership with Microsoft.

A short squeeze occurs when short sellers are forced to buy back shares of a stock that they have borrowed and sold, in order to cover their positions. This can happen when the stock price rises, as it has with GameStop. Short sellers are betting that the stock price will fall, and they profit when it does. However, if the stock price rises, they can be forced to buy back shares at a higher price, which can lead to losses.

Retail traders are individual investors who trade stocks through online brokerages. They have been increasingly active in the stock market in recent months, and they have played a major role in the GameStop rally. Retail traders are typically more likely to buy stocks that are popular on social media, and they are often willing to hold onto stocks for longer periods of time than institutional investors.

GameStop's recent partnership with Microsoft is also believed to have contributed to the surge in its stock price. The partnership will see Microsoft provide GameStop with cloud computing services, and it will also give GameStop access to Microsoft's Xbox Game Pass subscription service. This partnership is seen as a positive sign for GameStop's future, and it is likely to attract more investors to the stock.