On May 13, GameStop (NYSE: GME) saw its stock price surge by 74%, closing at $30.45, with trading volume hitting a new high since March 2021, causing short sellers to lose nearly $1 billion.

GameStop's stock price surged by 74% on Monday, closing at $30.45, reaching its highest trading volume since March 2021. Due to significant volatility, trading of the stock was halted multiple times. So far this month, GameStop has seen a cumulative increase of 175%. On the same day, other meme stocks such as AMC Entertainment (NYSE: AMC) also rose by 78%.

This surge in stock price was primarily driven by a short squeeze triggered by speculative short-term trading. This phenomenon occurred once before in early 2021 when individual investors heavily bought GameStop shares, forcing hedge funds like Melvin Capital to quickly cover their short positions, thereby further driving up the stock price.

GameStop has been striving to boost sales over the long term, but its advantage in physical disc sales is facing challenges as more people opt to download video games via the internet. Additionally, the rise of free-to-play games like "Fortnite" has weakened the demand for physical games.

Billionaire investor Ryan Cohen became involved in GameStop's acquisition in late 2020 and was appointed CEO in September 2023. Cohen has been focused on cutting costs through layoffs, store closures, and reducing marketing expenses. Despite the company achieving annual profits for the first time in several years in the 2023 fiscal year, its revenue is still declining.

The future of GameStop remains uncertain, despite the recent surge in stock price indicating short-term confidence in its transformation. Whether this momentum can be sustained will depend on the company's long-term strategy and market performance.