GameStop Stock Draws Retail Buzz After Third Weekly Drop: Retail Speculates Short Squeeze But Holds A Neutral View

• GameStop stock trended at the top of the Stocktwits trending list late on Sunday.
• Retail investors debate whether the fresh low is an opportunity to buy shares, with some expecting a short squeeze, while others are frustrated by the stock’s recent underperformance.
• Short interest in GME is near a year’s high, and its RSI suggests the stock could be oversold.

GameStop Corp.’s stock closed in the red for a third straight week last week, fueling a heated debate on Stocktwits on the future course. The ticker was trending at number one on the platform among U.S. equities as of late Sunday.

Shares declined 1.4% to $20.66 on Friday, marking a new 52-week low. 

Retail Debate

Even as the Stocktwits sentiment for GME has remained largely ‘neutral’ the last few days, retail investors debate whether the fresh low is an opportunity to buy shares, with some expecting a short squeeze. 

Another section of traders is frustrated by the stock’s recent underperformance (notably, GME wasn’t part of the recent “meme stock” rallies that lifted names like OpenDoor, Beyond Meat, and Krispy Kreme), expressing little confidence in the stock's future move.

“I will add to this position every single week at these prices. $GME is the most undervalued stock in the entire stock market,” remarked one user.  “The suppression and manipulation is so apparent and blatant, but it is a losing game and extremely irresponsible to continue to short a company with such amazing fundamentals.”

Missed Opportunity?

In September, the company’s solid second-quarter results — marking a fifth consecutive profitable quarter and a better-than-expected bottom line — translated into only a modest 3.3% rise in the stock the next day.

Short interest for the stock has risen steeply as well, with several Stocktwits expecting a short squeeze. From 7% in January, the short interest as a percentage of total shares in the market climbed to 17.8% in July before sliding modestly to 15.7% as of last week.

“$GME lowest RSI on daily since 2023,” said a user, referring to the relative strength index, which is a momentum indicator used in technical analysis to measure how quickly a stock’s price is rising or falling. According to Koyfin, the stock had an RSI of 27.3, which suggests the security is oversold. 

Mixed Sentiment Amid Weak Business

To be sure, GameStop has seen its business decline recently, with some analysts withdrawing coverage of the company; however, growth in new categories, such as trading cards, and financial moves, like accumulating Bitcoin and issuing stock warrants, have kept it at the top of investors' radars.

Not all are pleased, though. “$GME told u so, new low, all buyers this year have lost money,” said one user.

GameStop has yet to set a date for its third-quarter results release, which is expected in early December. The company’s stock has slumped by over 35% this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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