Game on, again: GameStop surges and no one truly knows why

FILE - In this Jan. 28, 2021, file photo, pedestrians pass a GameStop store on 14th Street at Union Square, in the Manhattan borough of New York. Wall Streets mania over GameStop is on again, at least for one afternoon. Shares in the troubled video game company more than doubled Wednesday, Feb. 24, 2021 to $91.71 apiece, the stocks best day since Jan. 27, when it was going for $347.51 a share. (AP Photo/John Minchillo, File)
FILE - In this Jan. 28, 2021, file photo, pedestrians pass a GameStop store on 14th Street at Union Square, in the Manhattan borough of New York. Wall Streets mania over GameStop is on again, at least for one afternoon. Shares in the troubled video game company more than doubled Wednesday, Feb. 24, 2021 to $91.71 apiece, the stocks best day since Jan. 27, when it was going for $347.51 a share. (AP Photo/John Minchillo, File) (Copyright 2021 The Associated Press. All rights reserved.)

NEW YORK – Wall Street's GameStop saga won't stop.

After weeks of going dormant, shares of GameStop have suddenly shot higher again, rising 18.6% Thursday after surging 75% in the last hour of trading Wednesday. Thursday's gain, which topped 101% before shrinking, came even as most stocks across Wall Street fell sharply on worries about rising interest rates. The moves are reminiscent of the shocking 1,625% surge for GameStop in January, when bands of smaller and novice investors communicating on social media launched the struggling video game retailer's stock.

That initial supernova heightened questions about whether the broader market was in a bubble and whether a new generation of traders should be able to take full advantage of the free trades available on their phones. Global markets swooned momentarily; Congress held a hearing.

No clear reason seems to be behind this most recent move, leaving market observers to grasp at what little news is out there, but it does demonstrate the increased power that regular investors suddenly have.

One major piece that drove last month’s surge is not as big a player this time around: a huge build-up of what’s called “short interest,” or bets by investors that the stock is set to fall. After short-selling funds got badly burned by last month's sudden surge, many fewer GameStop shares are being sold short now. That means this pop may not reach last month's heights.

“It’s like dropping a ping-pong ball on the table,” said Sam Stovall, chief investment strategist at CFRA. "The first bounce is the greatest while subsequent bounces are a bit more muted. We’re still getting a bounce, but it’s probably not going to drive up GameStop to $500 a share.”

Here’s what we know:

KITTY ROARS AGAIN — The most influential GameStop-backer may be Keith Gill, a colorful personality known for wearing a red headband and cat-themed T-shirts. He’s given regular updates of his GameStop holdings on Reddit’s WallStreetBets forum, going back to when a share cost just 85 cents in 2019. A day after testifying in a Congressional hearing about GameStop last week, he indicated he added another 50,000 shares after Feb. 3, doubling his GameStop stock position. By Feb. 3, GameStop had dropped toward $90 after touching a momentary peak of $483 in late January.