Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

GameStop shares spike after slump: will these surges be short-lived?

The GameStop share price saga is still volatile after the stock lost steam overnight. Shares in GameStop fell below $250 during after-hours trading, though have once again risen, prompting speculation that the bull run is ending.

Trader Source: Bloomberg
  • GameStop share price falls 33% overnight.
  • Prices once again spike on the morning of 28 January.
  • White House 'monitoring' situation.
  • Does overnight slump and early spike reflect ‘unsustainable’ bull run?

GameStop (GME.N) shares reached $372 on 27 January thanks to a rush of activity inspired by small traders. With members of the WallStreetBets (WSB) sub-reddit fuelling an unprecedented surge, trading was temporarily suspended as short-sellers scrambled to save their positions. However, prices seem set to spike once again. Does this reflect a naturally ‘unsustainable’ and unstable future for the stock?

GameStop share price reflective of unstable market

Following these two events, the GameStop share price dropped 33% from yesterday’s high ($372) to an overnight low of $248. A new sub-reddit subsequently emerged and GameStop shares regained momentum. They soon moved to $298 before retreating back down to $257. The rollercoaster ride ended with stocks finishing the session at $292. However, prices are beginning to creep up once again, suggesting to all involved that the rollercoaster ride is set to continue. The question remains, though, will the popularity of this stock surge soon run out of steam? The volatile and reactive patterns suggest yes.

Overall, activity in the last 24 hours caused the GameStop share price to fall 21.5% from $372 to $292. However, its value is still significantly up from the start of the week when the small investors vs. Wall Street short-sellers game began. In the early stages of the spike in after-hours trading activity on 20 January, shares steadily increased from $39 to $76. As the rumblings of a pump reverberated across the markets and, in turn, the value soared.

Will individual investors defeat Wall Street shorts?

The initial dip could be bad news for individual GameStop investors, as regulators have now entered the game. The recent rush has attracted the eye of newly appointed US Treasury Secretary Janet Yellen. In a statement from the White House, she confirmed that her team was ‘monitoring the situation’. This could lead to a pull back from investors looking to sell before trading is suspended completely. Or, based on the apparent raison d'etre of WallStreetBets, it could trigger further backlash.

Whatever the response, the GameStop share price is likely to remain volatile. The bull run might not be over, but the dip, and subsequent rise, may be a sign of things to come. Nils Pratley of The Guardian has described the surge as ‘unsustainable’ as ‘nothing of note has happened to improve GameStop’s commercial prospects’. The question now is, can Wall Street short-sellers beat small traders' self-styled ‘degenerate’ revolution?

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.