EXCLUSIVE: GameStop Expert Says 'Apes' Learned 'So Much' About Market, Are Helping Push For SEC Changes

Zinger Key Points
  • GameStop was the subject of a short squeeze in 2021, with retail investors betting against hedge funds and short sellers.
  • A GameStop expert breaks down how the movement led to traders learning more about the markets and pushing for change.

The rise of shares of GameStop Corporation GME was one of the biggest storylines of the financial markets in 2021. The story lives on, with GameStop shares rising on a surprise profit and many retail traders pushing for changes related to the stock.

What Happened: An epic David vs. Goliath battle between retail traders and hedge funds took place centered around GameStop stock in 2021.

GameStop shares soared, with retail investors recognizing the stock was not trading on fundamentals and many hedge funds shorting the stock, believing a bankruptcy was near.

On Tuesday, GameStop reported fourth-quarter net sales of $2.22 billion, beating a Street estimate of $2.18 billion. The company also posted a profit of 16 cents per share in the quarter, beating a Street estimate of a loss of 13 cents per share.

The storyline of the GameStop short squeeze and the rise in shares after reporting fourth-quarter earnings were among the topics covered on Wednesday’s “PreMarket Prep” show with guest Dave Lauer, the CEO of Urvin AI. 

“I just love to see it. The ‘Apes’ go to GameStop they buy the stock, they buy the goods, they do everything,” Lauer said.

Show co-host Dennis Dick said GameStop posted its first profitable quarter in years, adding the rise in shares after earnings could continue to show that it's not about the stock, but more about the movement.

“I would have never thought that retail could come together as a team to basically save" GameStop and AMC Entertainment Holdings AMC, Dick said. 

The retail traders helped get the short squeezes going, he said. 

“If you like it or don’t like it, you’ve got to be impressed.”

Lauer spoke of the power of community in helping the GameStop movement.

“I think it’s amazing, I think it’s a testament to technology, to these communities that are self-organized,” Lauer said.

Individual investors came together and thought the stock wasn’t trading on its fundamentals and also learned the characteristics of short interest and what it meant, he said.

Related Link: Here's When The GameStop Movie Starring Seth Rogen, Paul Dano And Pete Davidson Hits Theaters 

What’s Next For GameStop? The GameStop short squeeze has taught many individual investors about the stock market and the potential problems surrounding it, Lauer said. 

"They’ve learned so much about the market."

While investors have learned positives, they have also learned about how individual orders are monetized and how some orders never hit the public view, he said. 

Lauer said there are clear problems for the market and for price discovery.

“They found these loopholes, they learned about markets and they’ve decided markets should work differently and frankly it looks like the SEC agrees.”

Lauer said he is an advocate for fair markets and is a believer in the “WeTheInvestor” movement.

GME Price Action: GameStop shares are up 41.5% to $24.97 on Wednesday.

Read Next: GameStop Surges 44% After Earnings: Analyst Says Let 'Short Squeeze Begin'

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Posted In: NewsPenny StocksTop StoriesExclusivesSECMoversTrading IdeasInterviewDave LauerDennis DickPreMarket PrepShort Squeeze
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