What you need to know about GameStop’s stock price chaos

GameStop’s improbable run has lifted its stock to meteoric heights – all propelled by ordinary investors, spurred by a Reddit message board, looking to show up the Wall Street funds that bet big money on the shares to fall.

The frenzied trading has catapulted the video game retailer’s valuation to nearly $20 billion, a 14-fold increase from a month ago. Prices have risen so fast, and the drama over its stock trading has consumed so much attention, that members of the Biden administration and the U.S. Securities and Exchange Commission were compelled to say they were monitoring the situation.

Regular investors have openly rebelled against the deep-pocketed hedge funds that viewed GameStop as a mall-based dinosaur, destined to go the way of the record store.

They contend that a move away from physical stores and toward e-commerce, mobile gaming and streaming could reverse the company’s spiraling financials. They also figured that if the stock price rose, all the giant funds that had brazenly bet against the company would get crushed by the weight of being wrong. This, they intuited, would trigger a cycle that would further elevate the company and enrich the everyday trader at the expense of the Wall Street establishment. Regular investors have made similar runs at AMC Entertainment, BlackBerry, Nokia and others.

Why is GameStop stock rising?