How The GameStop Pop Compares To Tilray, Volkswagen, Other Historical Short Squeezes

Video game retailer GameStop Corp. GME is getting a lot of attention so far in 2021 for its dramatic short squeeze that has sent shares soaring from a 52-week low of $2.57 to as high as $483 Thursday morning. 

The GameStop squeeze isn’t a product of the company’s underlying fundamentals and is instead a product of market dynamics. Online trading communities such as Reddit’s WallStreetBets have collectively triggered a gamma squeeze in GameStop’s stock by buying out-of-the-money call options and forcing market makers to buy shares of the underlying stock to offset their short call positions.

That gamma squeeze has also fed into a short squeeze, which has sent GameStop shares soaring to all-time highs despite the fact that its retail business is seemingly in secular decline.

The GameStop trading action is certainly extreme, but the market has a long track record of huge short squeezes creating incredible results.

Here’s a look at how the GameStop squeeze stacks up against other major short squeezes in recent years — and how previous squeezes played out in the two years following their peak prices:

GameStop:

• 52-Week High: $483
• Prior 52-Week Low: $2.57
• Gain from low to high: +18,693%
• Two-year Returns From Peak: ?

Tilray:

In 2018, cannabis stock Tilray Inc TLRY was the subject of a massive short squeeze as cannabis stocks became some of the trendiest investments on Wall Street.

• 52-Week High: $300
• Prior 52-Week Low: $21.50
• Gain from low to high: +1,295%
• Two-year Returns From Peak: -92.7%

Volkswagen:

Back in 2008, German automaker Volkswagen A G VWAGY briefly became the most valuable company in the world when its market cap peaked at $370 billion thanks to a short squeeze.

• 52-Week High: $232.30
• Prior 52-Week Low: $41.50
• Gain from low to high: +459%
• Two-year Returns From Peak: -87.7%

KaloBios Pharma:

“Pharma bro” and convicted fraudster Martin Shkreli orchestrated a massive short squeeze in failed biotech company KaloBios Pharmaceuticals, now called Humanigen Inc HGEN, back in 2015.

• 52-Week High: $45.82
• Prior 52-Week Low: 36.2 cents.
• Gain from low to high: +12,557%
• Two-year Returns From Peak: -94.4%

DryShips:

One of the most volatile and extreme short squeezes in recent memory came during the downfall of shipping giant DryShips back in 2016. In the middle of a series of reverse stock splits, DryShips shares went on a historic run. The historical share prices are adjusted for the fact the company was taken private at a split-adjusted price of $5.25 in August 2019.

• 52-Week High: $799,680
• Prior 52-Week Low: $30,105
• Gain from low to high: +2,556%
• Two-year Returns From Peak: -99.9%

Benzinga’s Take: Once a stock like GameStop has become disconnected from its underlying fundamentals, there’s theoretically no limit as to how high the stock price can rise.

At this point, short sellers are too scared to touch the stock, so the price action is only determined by how much buying volume GameStop bulls can muster in the near-term and how much that bullish price action will force short sellers to cover more of their positions.