GameStop Corp (NYSE:GME) rose more than 29% on Wednesday to record its best session of the year in response to social media speculation over a potential short squeeze.
The American video game retailer saw over 9.9mln shares traded, more than double its normal volume.
In the coming weeks, GameStop is to report earnings and shareholders will vote on a stock split proposal.
The stock closed 29% higher on Wednesday at US$115.17.
Gamestop was the hub of meme-stock fever in 2021, which saw retail investors gang together on social media and buy huge quantities of 'shorted stocks' and it is still highly susceptible to random jumps and falls in the stock price.
Some 26% of GameStop's shares are currently being shorted (sold to buy back later at a lower price), so any substantial rise in the price encourages shorters to close positions (buy shares) to avoid losses, sending the price higher and starting the cycle again. That is commonly how a short squeeze develops.
On June 2, shareholders are to vote on a stock split aimed to increase the number of common shares from 300mln to 1bn and though GameStop has not yet disclosed the split ratio, it is counting on shareholder approval.
If approved, the 2022 Incentive Plan will also allow the issuance of 8mln common shares, with GameStop noting it needs the approval to continue to "attract, retain, and motivate the company's high-quality management team".
As part of its plan to transform into a much more digitally focused company, GameStop announced the launch of its digital wallet for non-fungible tokens (NFTs) and cryptocurrencies.